Supermarket Income REIT’s manager has made amendments to its investment advisory agreement to protect itself in the event of a takeover.
In the event of a takeover, delisting or liquidation, Atrato Capital would be paid fees that would have been due over the existing rolling two-year written notice period.
We have not heard any rumours that Supermarket Income REIT is a takeover target, but having been trading on a wide discount to NAV for a long time (although it has narrow recently to around 15%) it was bound to be on the radar of private equity.
The revised agreement also:
- clarifies that fees relating to the period following a relevant event are calculated on the basis of the last available NAV;
- gives Atrato the right, in addition to its existing right to terminate on two years’ written notice, to terminate the agreement following the announcement of a takeover, a possible takeover or a delisting. Such termination would take effect upon the relevant event becoming effective and the investment adviser would, on that date, receive a payment in lieu of written notice; and
- clarifies that if there is a liquidation or similar event, the investment adviser would immediately receive a payment in lieu of written notice equal to fees for a period of two years.
Acquisition
Supermarket Income REIT also announced the acquisition of a Tesco omnichannel supermarket in Stoke-on-Trent, Staffordshire, for £34.7m, reflecting a net initial yield of 7.5%.
The asset comprises 54,451 sq ft net sales area omnichannel supermarket and petrol filling station, which sits on an 8.7 acre site. The store was built in 1994 and supports Tesco’s online fulfilment operation via both home delivery vans and customer Click & Collect.
The store is being acquired with an unexpired lease term of 11 years and is subject to annual RPI-linked rent reviews (subject to a 4% cap and a 0% floor).
The acquisition has been funded through the drawdown of the company’s existing revolving credit facility.