Supermarket Income REIT PLC (LSE:SUPR, OTC:SUPIF) is acquiring a portfolio of Carrefour supermarkets in France for €75.3 million in a sale and leaseback transaction.
The portfolio includes 17 omnichannel supermarkets under the Carrefour Market brand in northern France. These stores, each with an average gross internal area of about 40,000 square feet, are integral to Carrefour's 'Drive" online grocery fulfilment network and have a long-standing history of successful trading.
Investors were told the weighted average lease term is 12 years, featuring a tenant-only break option in the tenth year. Each lease includes provisions for annual uncapped inflation-linked rent reviews, securing the REIT's income against inflation fluctuations.
"We are delighted to have completed this strategic sale and lease back transaction with Carrefour, one of the largest grocers in the world. The transaction represents the Company's first investment in the €284 billion French grocery real estate market," said Ben Green, director of Atrato Capital, the Supermarket REIT's investment advisor.
"This accretive transaction is complementary to our existing portfolio, providing further tenant diversification and continues our strategy of investing in the future model of grocery."
To finance this significant acquisition, Supermarket Income REIT has used €81.7 million from its existing revolving credit facility with HSBC.
The borrowing costs for this new Euro-denominated loan are set at 1.7% over EURIBOR.
Post-acquisition, the company's pro-forma net loan-to-value (LTV) ratio stands at 37%, emphasizing a stable financial positioning while leveraging attractive long-term borrowing costs.