Supermarket Income REIT acquires three UK supermarkets

Supermarket Income REIT (SUPR) has finalised the purchase of three UK-based supermarkets for a combined total of £97.6 mln (€114.1 mln).

Supermarket - Supermarket Income REIT

The deal represents an average net initial yield of 5.5%. The acquisition includes three established and high-performing sites with long-standing tenants.
In Aylesbury, a flagship 4.5-hectare site featuring a 10,219 m2 Tesco store has been purchased for £56.3 mln (€65.9 mln). It is held on an 11-year triple-net lease with annual RPI-linked rent reviews (capped at 3%).
A Sainsbury's store in Sale has been secured for £33.8 mln (€39.5 mln) through an off-market deal at a 5.9% yield; this 5,574 m2 store has 16 years remaining on its lease.
In Frimley, SUPR has acquired a 2,787 m2 Waitrose store for £7.6 mln (€8.9 mln) with a 6.2% yield. Waitrose maintains an 11-year lease with five-yearly CPI-linked reviews.
The purchases were financed using the company’s current debt facilities. Following these transactions, the Group’s financial profile is expected to show a loan-to-value ratio of 43% and a WAULT of 12 years, while 75% of the portfolio is now let to investment-grade tenants.
Rob Abraham, CEO of Supermarket Income REIT, commented: "The acquisitions come at the end of a transformational year for SUPR, where we delivered on key strategic objectives, including lease renewals, internalisation, our debut bond issuance and changes to our listing. We established and scaled our strategic joint venture with Blue Owl Capital Managed Funds, enabling us to execute on an attractive pipeline of assets whilst receiving management fee income on stores transferred into the JV. We are on track to have recycled approximately £400 million of capital this year into an exciting range of acquisitions across the various channels in our earnings-accretive pipeline."