Supermarket Income REIT and Blue Owl Capital set up JV

Supermarket Income REIT (SUPR) and US alternative asset manager Blue Owl Capital have set up a joint venture to acquire up to £1 bn (€1.1 bn) worth of UK supermarket properties. 

SUPR seeded the venture with £403 mln (€472 mln) of eight supermarket assets from its current portfolio. 
The initial portfolio of supermarket properties in the joint venture includes stores operated by Morrisons, Sainsbury's, and Tesco, located in various UK cities including Sheffield, Cheltenham, Huddersfield, Cumbernauld, Llanelli, Stoke-on-Trent, and Worcester.
The supermarket estate company will maintain a 50% stake in the joint venture, receiving £200 mln (€234 mln) in cash. 
The London-based REIT will use the funds to reduce debt and invest in further supermarket acquisitions. In addition, it will earn management fees and potential performance bonuses for managing Blue Owl's share of the venture.
The joint venture also provides SUPR with a right of first refusal on future suitable acquisitions. This strategy benefits shareholders through increased earnings, larger assets under management, and continued exposure to a strong pipeline of supermarket properties.
The JV partnership represents Blue Owl’s managed funds’ first major investment in the UK grocery space.
Robert Abraham, CEO of Supermarket Income REIT, commented: "The JV with Blue Owl's managed funds brings a high quality, strategic capital partner that shares our conviction in the value of high-yielding UK supermarkets. The JV partnership represents Blue Owl's managed funds' first major investment in the UK grocery space and is a strong endorsement of the expertise and track record SUPR has established in this market.
Marc Zahr, co-president and global head of Real Assets at Blue Owl, said: "SUPR is the leading UK grocery real estate investor, and we view them as the right counterparty as we execute on our first major transaction in the UK grocery sector. We see an opportunity to generate attractive returns from these assets, which are underpinned by the growing and highly resilient UK grocery sector."