Supermarket Income REIT has acquired four supermarkets for £76.4m, reflecting a combined net initial yield of 5.1%.
Acquired from different vendors, the purchases consist of two Tesco supermarkets, located in Cheltenham and Merseyside, as well as a central Glasgow site anchored by a Sainsbury’s supermarket and an M&S Foodhall.
The Tesco in Bishops Cleeve, Cheltenham, comprises 29,501 sq ft net sales area located on a 4.0-acre town centre site with 245 car parking spaces. The store is being acquired with an unexpired lease term of 12 years and is subject to annual RPI-linked rental uplifts (subject to a 5.0% cap and a 0.0% floor).
The Tesco in Newton-le-Willows, Merseyside, comprises a 22,298 sq ft net sales area supermarket located on a 2.9-acre town centre site with 172 car parking spaces. The store is being acquired with an unexpired lease term of 12 years and is subject to annual RPI-linked rental uplifts (subject to a 5.0% cap and a 0.0% floor).
The city centre Glasgow site comprises a 16,893 sq ft net sales area Sainsbury’s supermarket with an unexpired lease term of 10 years and an M&S Foodhall with an unexpired lease term of four years, both subject to five-yearly, upwards only, open market rent reviews.
Adjoining the Sainsbury’s and M&S Foodhall are further units providing local health and convenience services that are occupied by tenants including Boots, Superdrug and Costa Coffee.
The four supermarket acquisitions have been funded in part through the first drawdown on the company’s £412.1m unsecured credit facility, which has a margin of 1.5% above SONIA, currently equivalent to an all-in finance cost of 3.4%.
Ben Green, director of Atrato Capital Limited, the company’s investment adviser, said: “These acquisitions provide further diversification to the company’s growing portfolio. The strong trading M&S Foodhall adds a third M&S to SUPR’s portfolio and we are pleased to be taking on the adjoining non-grocery tenants in Glasgow. These adjoining units add to our existing non-grocery assets, which continue to represent less than 10% of our overall portfolio by value.”
SUPR : Supermarket Income REIT goes on £76m shopping spree