Supermarket Income REIT acquires £54m Tesco in Kent
Supermarket Income REIT has acquired a Tesco supermarket in Ashford, Kent, for £54.1m, reflecting a net initial yield of 7.0%.
Situated on an 8.2 acre site, the asset comprises a 93,000 sq ft food store and adjacent petrol filling station.
Tesco has traded from the site for over 30 years and uses the store as an online fulfilment hub with 14 delivery vans. The supermarket also offers click-and-collect services.
The store has been acquired with an unexpired lease term of nine years with annual RPI-linked rent reviews.
Supermarket Income REIT said it believes that current market conditions provide an attractive buying opportunity, at a point in the real estate cycle where supermarket property valuations are at multi-year lows and long lease inflation-linked assets can be acquired at accretive yields.
This acquisition is the first transaction for the real estate investment trust as it redeploys the proceeds arising from the formation of its recently announced strategic joint venture with funds managed by Blue Owl Capital. The company said it sees a number of complementary routes to help drive growth, scale, and liquidity whilst also maintaining sector focus.
Rob Abraham, CEO of Supermarket Income REIT, said: ”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 focusses on scaling the business whilst delivering sustainable earnings growth for our shareholders.”