LXi REIT has completed a £3.4m sale and leaseback deal with the Stobart Group of the freehold interest in the Stobart biomass storage and processing plant in Rotherham, Yorkshire.
The purchase price for the asset, which has been let on a new 20-year lease by Stobart, reflects a net initial yield of 6.2%.
The acquisition is being funded using the proceeds of the company’s new 11.5-year loan facility secured from Scottish Widows in December 2017 at a fixed rate of 2.85% per annum.
The six-acre property will be used by Stobart Group as a storage and processing site to supply the nearby 41 megawatt Templeborough Biomass Power Plant with biomass timber waste. The property is located close to the centre of Rotherham and has access to the national motorway network, with the M1 and M18 in close proximity.
John White, partner of LXi REIT Advisors, said: “We are pleased to have acquired, off-market, the Stobart biomass storage and processing facility, which provides the company with an attractive net initial yield and secure, long-dated, inflation-linked income stream. The property is underpinned by a strong industrial location and residual value and further diversifies the company’s tenant and sector exposure.”
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