Member Article

LXi has acquired a busy service station in the South East for £5m

London-based property investor LXi REIT has confirmed it has exchanged contracts to acquire an out of town service station development for £5m.

The deal for Needham Market service station in Ipswich will see LXi acquire the Travelodge as well as Burger King and Little Chef units on the site, with both the hotel and restaurant provision on the site let to Travelodge Hotels Limited.

According to the property firm, the lease current has an unexpired lease term of over 20 years without a break and is subject to five yearly upward only rent reviews linked to the RPI, with the next review due in January 2020.

The property is also strategically situated at a busy junction of the A14 and A140 and sits a handful of miles north west of Ipswich town centre.

Simon Lee, Partner of LXi REIT Advisors Limited, commented: “This acquisition provides the Company with additional long-term, secure and RPI-linked income with an unusually attractive rent review collar of 3% pa and cap of 7.5% pa, offering significant rental growth in both high and low inflationary environments.

“The net initial yield of 6.12% is accretive to our portfolio running yield and will rise to at least 7.10% at the January 2020 rent review on the basis of just the minimum 3% pa rental uplift.”

LXi anticipates completion to occur in the next few weeks with the deal funded through equity resources and senior debut finance in the near term.

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