Supermarket Income REIT PLC (LSE:SUPR, OTC:SUPIF) has received £116.9mln from the second tranche of the sale of its interest in Sainsbury's Reversion Portfolio (SRP), per the deal first announced in March.
Supermarket Income REIT intends to use these proceeds to reduce near-term debt.
Based on the last published portfolio valuation on 31 December 2022, the group’s loan to value (LTV) will be approximately 33% following this debt repayment.
As part of the final completion of this transaction, Supermarket Income REIT has acquired Sainsbury's’ 46% interest in the four remaining stores in the SRP for a net consideration of £28.3mln.
SRP, which consists of 26 Sainsbury's supermarkets, was initially acquired by a joint venture comprising Supermarket Income REIT and British Airways Pension Trustees, with the REIT’s contribution totalling £108.5mln, excluding costs.
Sainsbury's entered into new 15-year leases on these stores with five-yearly open-market rent reviews and a tenant break option at year 10.
Following the completion of the transaction, which has generated the company total gross proceeds of £430.9mln and delivered an internal rate of return of 30%, a promote fee of £7.5mln has been paid to Atrato Halliwell, an affiliate of Supermarket Income REIT’s investment advisor.