Supermarket Income REIT purchases Tesco supermarket for €62m

Supermarket Income REIT has purchased a Tesco omnichannel supermarket in Ashford, Kent, for £54.1 mln (€62.4 mln), representing a net initial yield of 7.0%.

Tesco store in Ashford

This acquisition includes an 8,640 m2 supermarket, a petrol station, and occupies a 3.3-hectare site.
Tesco has operated on the site for over 30 years, utilizing it as an online fulfillment centre with home delivery and Click & Collect services.
The property has a remaining lease term of nine years, with annual rent increases linked to the Retail Price Index (RPI), capped at 5% and with a 0% minimum.
The company believes current market conditions offer a favourable opportunity to acquire supermarket properties at attractive yields, as valuations are at a multi-year low.
This acquisition marks the first investment using proceeds from the recently formed joint venture with Blue Owl Capital.
Supermarket Income REIT aims to drive growth and increase liquidity through strategic acquisitions, including diversifying its tenant base and exploring various store formats while maintaining the quality of its income. The company's objective is to enhance earnings and deliver a growing, well-covered dividend over the long term.
Rob Abraham, CEO of Supermarket Income REIT, commented: "I'm very pleased that we have begun redeploying the proceeds arising from our recent joint venture, acquiring this top trading Tesco supermarket at an attractive price, which will make a material contribution to our earnings from day one. The team continues to work hard to execute on a number of further pipeline opportunities as it focuses on scaling the business whilst delivering sustainable earnings growth for our shareholders."