Supermarket Income REIT PLC (LSE:SUPR, OTC:SUPIF) said it has acquired a 25.5% stake in the Sainsbury's Reversion Portfolio (SRP) from British Airways Pension Trustees Limited for £196mln, increasing the REIT’s interest in the SRP to 51%.
The portfolio comprises 26 freeholds of J Sainsbury PLC supermarkets, 21 of which will be purchased by the chain in March and July for over £1bn.
Supermarket Income REIT will receive a minimum of £380mln in cash from Sainsbury's in two tranches, in March and July 2023.
To date, the company’s stake in SRP has produced an estimated money-on-money multiple of 1.9 times and a 26% internal rate on return, and the latest acquisition is expected to be accretive to the company's future returns.
The acquisition was funded by a new debt facility provided by JPMorgan Chase Bank which will be repaid in full after the first payment from Sainsbury's in March 2023.
Dividend declaration
In a separate statement, Supermarket Income REIT also announced its latest dividend declaration.
An interim dividend of 1.5p per share for the period of October to December 2022 is to be paid on or around 23 February as a property income distribution to shareholders on the register as of January 20. The ex-dividend date is set as January 19.
Shareholders can opt to receive new shares in lieu of cash dividends, the price of which will be announced on January 27. Shareholders wishing to take up this option have until February 7 to return their completed mandate form to the company registrar or take the necessary action via the CREST system.