Supermarket Income REIT shops for £104m of new assets
Supermarket Income REIT has acquired six grocery assets including a fully-let retail park for a total of £104m.
Following the real estate investment trust’s exchange of contracts to acquire a portfolio of three supermarkets for £118m, the group said the proceeds from its £100m equity raise in July have now been fully deployed, at an average net initial yield of 6.6% and a weighted average unexpired lease term of 10 years.
Included in the latest batch of acquisitions is a 74,000 sq ft Sainsbury’s supermarket in Macclesfield, which features a click-and-collect delivery service and home delivery vans. The asset has a triple-net unexpired lease term of 13 years and is subject to annual RPI-linked rent reviews with a 4% cap and 2% floor. The store produces a rental income of £37 per sq ft.
In addition, the group has acquired an 80,000 sq ft Morrisons supermarket in Leeds, which also offers a click-and-collect delivery service. The store has a triple-net unexpired lease term of 13 years and produces a rental income of £21 per sq ft. The asset is subject to five-yearly RPI-linked rent reviews with a 4% cap and 0% floor.
Supermarket Income REIT has also acquired an M&S-anchored retail park in Nottinghamshire. The 50,000 sq ft, fully-anchored scheme is home to tenants including B&Q, Costa, Greggs, and Mountain Warehouse. The tenants are subject to triple-net leases with five-yearly open market rent reviews. Tasset has a weighted average unexpired lease term of five years and produces a rental income of £18 per sq ft.
The group has also snapped up a 4,000 sq ft Co-op food store in Birmingham. The store – which has a triple-net unexpired lease term of eight years – is subject to five-yearly RPI-linked rent reviews with a 4% cap and 1% floor, producing a rent of £20 per sq ft.
The final food store included in the acquisitions is an M&S-anchored scheme in Glasgow. The 10,000 sq ft asset has a triple-net unexpired lease term of six years and is subject to five-yearly open market rent reviews, with rent of £20 per sq ft.
Finally, Supermarket Income REIT has acquired a 67,000 sq ft Sainsbury’s grocery distribution centre in Avonmouth. The asset has a triple-net unexpired lease term of 14 years, and is subject to five-yearly open market rent reviews.
Rob Abraham, CEO of Supermarket Income REIT, said: “These acquisitions add six high-quality grocery assets to our portfolio, marking the completion of the deployment of the proceeds of our £100 million equity raise in July. We are pleased to have delivered this compelling pipeline of acquisitions within two months. Importantly, these acquisitions represent further progress in our strategy to diversify the portfolio, adding grocery distribution and additional exposure to grocery-anchored retail, to our core UK foodstores, which span larger, omnichannel supermarkets through to convenience.”