LondonMetric and LXi complete £6.2bn merger

LondonMetric Property and LXi have completed an all-share merger which sees the creation of the UK’s fourth-biggest real estate investment trust (REIT), with a combined portfolio value of approximately £6.2bn.

The portfolio is aligned to the convenience, entertainment, leisure, healthcare, and logistics sectors, with a weighted average unexpired lease term of 19 years on FRI leases and an occupancy rate of 99%.

Following the merger, LondonMetric has appointed Nick Leslau, previously of LXi, as a non-executive director.

LondonMetric has also announced that it has disposed of two non-core assets for a total of £5.9m, including a 37,000 sq ft B&Q store in Burnley which was acquired as part of the CT Property Trust portfolio in August 2023. Following these sales, LondonMetric has sold £184 million of assets so far this financial year.

Andrew Jones, chief executive of LondonMetric, said: “The merger is a transformational deal that creates the UK’s leading triple net lease REIT with full occupancy and exceptional income longevity and certainty of income growth. The new larger business will deliver better liquidity, material economies of scale, substantial cost savings with improved terms in both debt and equity markets. Our enlarged balance sheet will also allow better access to new opportunities of scale, which will drive accelerated earnings and dividend progression.

“I would like to take this opportunity to welcome both our new shareholders as well as our new colleagues from LXi including Nick Leslau to the board. Our team is strongly aligned to shareholders and has deep real estate experience with a strong track record for capital allocation, asset recycling and active management.

“As evidenced by today’s update, we will continue to reposition parts of the portfolio with an emphasis on growing our exposure to logistics which remains our strongest conviction call and is delivering high organic rental growth. We are also seeing interesting investment opportunities arising from debt refinancings and fund redemptions and the acquisition announced today is an excellent example of an innovative transaction that leverages our strong relationship with the developer and offers an attractive return profile.”