Higher property values cut both ways for commercial real estate investment trusts. Owning the right assets drives growth in net asset value, which can bring with it more headroom beneath debt covenants and access to cheaper debt. But paying more for acquisitions also has the potential to sap returns.
A diversified investment mandate has given LXI Reit the ability to build positions in fruitful parts of the property market, with an annual NAV return of just over 18 per cent comfortably outstripping a medium-term target of 8 per cent. Some of that can be attributed to recovery in sectors hit by the pandemic, such as pubs and hotels, but the stronger growth in industrial and food retail assets has more endurance.
A mooted merger with
