Annual Report

For the year ended 31 March

2022

LXi REIT Annual Report 2022

Overview

LXi REIT plc 1

Highlights 2

Strategic report

Key performance indicators 31

EPRA performance measures 32

Section 172 statement 33

Principal risks and uncertainties 35

Going concern and viability statement 38

Directors’ report 41

Report of the Audit Committee 52

Report of the Management Engagement Committee 55

Financial statements

Consolidated statement of comprehensive income 68

Consolidated statement of financial position 69

Notes to the consolidated financial statements 72

Company statement of financial position 95

Company statement of changes in equity 96

Additional information

Notes to the EPRA and alternative

performancemeasures 102

Company information 105

We also carefully invest in fixed-priced forward funded developments, provided they are pre-let to an acceptable tenant and full

planning permission is in place. The Company, along with its subsidiaries (together, the “Group”), does not undertake any direct

development activity nor assume direct development risk.

The Company, area real estate investment trust (“REIT”), is listed on the premium listing segment of the Official List of the Financial

Conduct Authority and was admitted to trading on the main market for listed securities of the London Stock Exchange in

February 2017.

The Company is aconstituent of the FTSE 250 Index, FTSE EPRA/NAREIT Global Real Estate Index Series and MSCI index.

Overview

Annual results for the year ended 31 March 2022

dividends paid during the year. Since IPO, the Group has

delivered an annualised total NAV return of 11.2% pa, well

ahead of our 8%+ medium-term target

• Portfolio independently valued at £1,544.4m reflecting like

for like growth of 10.5% in the year. The growth was broadly

spread across sub-sectors as follows, with detail of the key

drivers given in the Investment Advisor’s report:

• Adjusted EPS of 7.0p (31 March 2021: 7.5p), down slightly

• Dividends paid and declared in respect of the year total 6p

• Average net initial yield (“NIY”) on acquisitions to date

of 5.5% net of purchase costs (31 March 2021: 5.7%) with

significant compression to valuation at 31 March 2022,

reflecting a4.5% NIY (31 March 2021: 4.9%)

• 65 separate properties acquired during the year, including

acquisitions that had exchanged but not completed at the

reporting date, with the proceeds from two equity raises, for

a combined purchase price of £558.2m (including forward

average geared IRR on disposal of 24% pa to date

• The portfolio now comprises 193 separate properties and

is spread across 11 subsectors, having entered two new

subsectors during the year in education and life sciences and

splitting out garden centres into a separate sector (on which

more detail is given in the Investment Advisor’s report)

• 96% of contracted rents contain upward only index-linked

rent reviews or fixed uplifts (31 March 2021: 96%)

• 76% of contracted rent reviews contain either acollared

or fixed uplift (31 March 2021: 69%), averaging 2% pa

• Portfolio weighted average unexpired lease term (“WAULT”)

• During the year, the Board has enhanced its own overview

• We are focussing on our reporting and the reduction of the

• The Board announced atarget annual dividend of 6.3p per

. This represents

My congratulations and thanks go to the management team at

the Investment Advisor, and to all of those who have served and

continue to serve as Directors of the Company, for their sound

stewardship and prudent decision making that have built the

solid platform that exists today.

This has been another year of positive growth for the Group in

which existing and new shareholders continued to support the

Company to issue afurther £354m of gross equity capital. The

net proceeds were deployed to grow the portfolio, to achieve

• yield compression across many of the Group’s sectors which

• further yield compression in those sectors that were broadly

Our ESG strategy is focussed on three key pillars:

1. Integration of ESG into the Company’s investment policy –

but recognise the challenge in data collection from such

abroad range of tenants. The Group is committed to setting

ascience-based target date by the next annual report, for

the year ending 31 March 2023.

measures and the 11 recommended disclosures under TCFD.

positively to the move to agreen economy.

I assumed the role of Chairman of the Company and Hugh

Seaborn assumed the role of Senior Independent Director

asa non-executive Director.

On behalf of the Board and Investment Advisor, I would like to

approve the transaction as outlined in the Company’s circular

to shareholders posted on 1 June 2022 with the vote expected

to be held at a general meeting of shareholders on 22 June 2022.

As outlined in the circular, my fellow Directors and I believe

that the merger brings together two complementary portfolios

whilst maintaining the conservative and highly attractive

investment case that our shareholder have benefitted from

since IPO and has therefore recommended by the Board.

Forecasts for the Economy Medium-term forecasts, May 2022).

of yields where a portfolio becomes overrented.

As interest rates continue to rise as a measure to counter higher

Goingforward we remain focused on managing both the risks

and opportunities that the portfolio presents, to capitalise

on growth opportunities that we continue to identify and to

continue to provide a secure and growing income return to

ourinvestors whilst enhancing and unlocking sustainable

valuein our defensive, resilient portfolio.

Chairman