Supermarket Income REIT has acquired six grocery assets for £104m, completing the deployment of proceeds from its £100m equity raise in July.
The acquisitions, announced on 11 September, comprise two supermarkets, two M&S-anchored schemes, a Co-op foodstore and a Sainsbury’s grocery distribution centre.
The portfolio includes a 74,000 sq ft Sainsbury’s supermarket in Macclesfield, which has a Click & Collect facility and home delivery vans. The store has a 13-year triple-net unexpired lease, with annual RPI-linked rent reviews.
Also acquired is an 80,000 sq ft Morrisons supermarket in Leeds, which has a Click & Collect facility and home delivery vans. It has a 13-year triple-net unexpired lease and five-yearly RPI-linked rent reviews.
The M&S-anchored retail park in Nottinghamshire comprises 50,000 sq ft and is fully let to national retailers including B&Q, Costa, Greggs and Mountain Warehouse. Its triple-net leases have a weighted average unexpired lease term of five years, with five-yearly open market rent reviews.
The remaining acquisitions comprise a 4,000 sq ft Co-op foodstore in Birmingham, with an eight-year triple-net unexpired lease; a 10,000 sq ft M&S-anchored scheme in Glasgow, with a six-year triple-net unexpired lease; and a 67,000 sq ft Sainsbury’s grocery distribution centre in Avonmouth, which has a 14-year triple-net unexpired lease.
Both M&S properties have rents of £20 per sq ft, while the Co-op store has a rent of £20 per sq ft. The Sainsbury’s Macclesfield property has a rent of £37 per sq ft, while the Morrisons Leeds store has a rent of £21 per sq ft.
The latest acquisitions follow SUPR’s announcement in July that it had exchanged contracts to acquire a further portfolio of three supermarkets for £118m.
Together, the two transactions represent £222m of acquisitions and fully deploy the £100m equity raise, at an average net initial yield of 6.6 per cent and a weighted average unexpired lease term of 10 years.
“We are pleased to have delivered this compelling pipeline of acquisitions within two months,” Rob Abraham, CEO of Supermarket Income REIT, said.
“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.”
Supermarket Income REIT, a FTSE 250 company, is focused on grocery properties that form part of national food infrastructure. Its portfolio comprises predominantly omnichannel grocery stores, which serve both online and in-person sales, let to leading supermarket operators in the UK and Europe.