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Supermarket Income REIT acquires £34m Sainsbury’s store

Supermarket Income REIT has acquired a Sainsbury’s store in Hessle, East Riding of Yorkshire, for £34m, reflecting a net initial yield of 5.5%.

The 50,000 sq ft store is let to Sainsbury’s on an unexpired lease term of 14 years with annual inflation-linked uplifts.

As well as the 1980s-built supermarket, the site 13-acre site also includes a 12-pump petrol filling station and a 21,000 sq ft Homebase store.

The Homebase has an unexpired lease term of four years that will be guaranteed by Sainsbury’s for the duration of the lease. Consequently, the combined total net initial yield on this purchase of the site, including the rental income from the Homebase, is 6.3%.

The Sainsbury’s store, which was refurbished in 2011, includes a purpose-built online fulfilment docks and supports Sainsbury’s online grocery fulfilment for the surrounding area.

Ben Green, director of Atrato Capital, the investment advisor to Supermarket Income REIT, said: “This Sainsbury’s superstore is ideally located for both online and offline grocery sales and adds to Supermarket Income REIT’s growing portfolio of omnichannel stores.”

The deal is the latest acquisition by Supermarket Income REIT, which raised £100m in October 2019. As reported last week, the group is also in discussions to buy a stake in a 26-strong Sainsbury’s portfolio.

The grocery market is one of the few retail sub-sectors that is performing well and has been less impacted by online shopping. QuotedData has published a research note on the retail property market – to read it click here.

SUPR : Supermarket Income REIT acquires £34m Sainsbury’s store

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