Supermarket Income buys Sainsbury’s in Newcastle – Supermarket Income REIT has bought a Sainsbury’s supermarket in Heaton, Newcastle upon Tyne, from the National Farmers Union for £53.1m, reflecting a combined net initial yield of 4.1%.
The 11-acre site was originally developed in the 1980s and completely rebuilt in 2011. There is a 68,000 sq ft net sales area supermarket with purpose-built online fulfilment docks, which support Sainsbury’s online grocery fulfilment across the store’s catchment area, over 420 parking spaces and a 12-pump petrol filling station.
The supermarket comes with an unexpired lease term of 21 years with five-yearly, upward-only, RPI-linked rent reviews (subject to an annual 4.0% cap and 1.5% floor). The next scheduled rent review is in November 2021 which will see the combined net initial yield from the site increase to a minimum of 4.6%.
The site also includes three unoccupied commercial units yielding over 9% which are principally leased to Peugeot Motor Company for a remaining term of six years.
NFU bought the site in 2015 for £44.5m on a net initial yield of 5%.
SUPR : Supermarket Income buys Sainsbury’s in Newcastle