LXI REIT, the UK commercial property asset investor, has reported an increase in dividends and a ‘resilient’ performance.

Dividends per share totalled 3.15p in respect of the half-year (30 September 2021: 3.00p per share), which represents 5% growth on the previous six-months.

Despite challenging market conditions and volatility in share prices and property values, the Company has delivered a resilient performance for the six months with a total accounting return of 0.1% (30 September 2021: 9.0%).

Cyrus Ardalan, Chairman of LXi REIT plc, commented: “This year’s merger between LXi and Secure Income REIT has been truly transformational for the Group. I welcome our new shareholders and thank all our shareholders for their continuing support.

The merger has significantly enhanced the scale of our operation. It has also strengthened the defensive characteristics of our portfolio, positioning us well to navigate the economic headwinds the UK now faces. Furthermore, we achieved significant cost savings from the merger, which will be visible in our full year results.

Geopolitical uncertainty and soaring inflation have resulted in volatile markets. Interest rates continue to rise, and the economy is projected to enter a recession. I am, however, comforted by the Group’s defensive portfolio with diversified and very long-let assets, high quality tenant operators and resilient sub-sectors that are non-discretionary or ‘trade down’ alternatives.

Our inflation protected rents and very long leases are already showing their defensive qualities. As a result, rental growth has largely offset the negative movement in our portfolio valuations to deliver a neutral total return for the half-year.

In the months ahead we will be focusing on a number of important initiatives. We are in the process of refinancing our shorter-term debt to provide stakeholders with longer-term certainty and to underwrite our progressive dividend policy. We plan to recycle capital through selective disposals to reduce leverage or to capitalise on opportunistic purchases. Finally, we aim to generate and protect value for shareholders through accretive asset management initiatives.

I am confident in our ability to deliver on these objectives in the near-term and that we are well placed to continue to generate attractive risk-adjusted returns with inflation protection for our shareholders.”

LXI REIT plc invests in UK commercial property assets let, or pre-let, on long (typically 20 to 30 years to expiry or first break), inflation-linked leases to a wide range of strong tenant covenants across a diverse range of robust property sectors.

The Company may invest in fixed-price forward funded developments, provided they are pre-let to an acceptable tenant and full planning permission is in place. The Company will not undertake any direct development activity nor assume direct development risk.

The Company is targeting a dividend of 6.3 pence per ordinary share for the year which commenced on 1 April 20223.

The Company, a real estate investment trust (“REIT”) incorporated in England and Wales, is listed on the premium listing segment of the Official List of the UK Listing Authority and was admitted to trading on the main market for listed securities of the London Stock Exchange in February 2017.