LXi REIT plc has completed the £3.8m freehold interest acquisition of regulated long-let supported living properties in Yorkshire.
The purchase price is said to reflect a net initial yield of 6.0% – net of acquisition costs to the company.
Each property is immediately income producing and has been let on a new 25-year lease, with no tenant break, to a specialist registered provider of social housing receiving its funding for the rent payments directly from the relevant local authority.
Each lease is subject to annual upward-only rent reviews index-linked to the Consumer Price Index (uncapped) and the registered provider is responsible for the costs of repair, maintenance, insurance and outgoings.
The properties in the portfolio comprise specialist supported living homes for individuals with physical and/or mental disabilities or other care needs.
Acquisition is funded from equity resources, with senior debt finance expected to be introduced in the near term.
The company has now also completed on the acquisition of the Priory Care Home in Leeds, the exchange of which was announced earlier this month..
Simon Lee, partner of LXi REIT Advisors Limited, said: “This supported living portfolio provides the company with an attractive 6.0% net initial yield underpinned by unbroken 25-year, index-linked leases to a registered provider of social housing, and offers vulnerable adults high quality, long-term, safe and attractive community living environments.
“The acquisition, our eleventh since IPO, further underlines our approach to building a diversified, secure and index-linked portfolio, encompassing a very wide range of property sub-sectors, tenants and locations.”