LXi REIT confirmed reports it is in talks to buy a number of stores from J Sainsbury PLC (LSE:SBRY) in a £500mln deal.
In a statement, LXi said the discussions revolved around a sale and leaseback agreement for a portfolio of 18 stores predominantly located in the south of England which would be let to Sainsbury's Supermarkets.
The portfolio benefits from several defensive characteristics including: strong trading performance, very low and sustainable indexed rents, long-term 'green' leases, low site coverage and modern buildings that provide omni-channel sales optionality.
LXi said an acquisition price of around £500mln would equate to a net initial acquisition yield of around 5%, to be funded through a mix of new equity and debt in-line with its existing borrowing policy.
Shares in LXi REIT rose by 1.16% to 140p while J Sainsbury PLC (LSE:SBRY) shares were up 1.66% at 197.4p.