Supermarket Income REIT PLC (LSE:SUPR, OTC:SUPIF) has completed a series of portfolio initiatives, including the sale of a Tesco store, lease renewals on three sites, and the acquisition of additional Carrefour supermarkets in France.
The company said it has sold the Tesco Newmarket store back to the grocery giant for £63.5 million, reflecting a 7.4% premium to its valuation as of last June.
The board intends to recycle the proceeds into "options to create accretive value for shareholders".
Leases have also been renewed for Tesco stores in Bracknell, Bristol, and Thetford, which were the three shortest-leased Tesco sites in the fund's portfolio.
The renewals extend all the leases to 15 years with RPI-linked rent reviews capped at 4% annually). The new rents are an average 4% rent to turnover, 13% above the company’s valuation estimates and 35% above the MSCI benchmark.
Additionally, the REIT said it acquired a further nine Carrefour supermarkets in France for €36.7 million on sale and leaseback deals, at a 6.8% net initial yield.
Operating under the Carrefour Market brand to form part of the retailer’s online fulfilment network, the stores have 12-year leases with annual inflation-linked reviews.
The acquisition was financed via a €39 million private placement of senior unsecured notes, carrying a 4.1% fixed rate coupon and a seven-year maturity.
Following these transactions, the company’s pro-forma loan-to-value (LTV) stands at 38%.
Chair Nick Hewson said: “We have made significant progress on the portfolio initiatives that we set out in November 2024, which together are intended to support our earnings growth.
"These transactions highlight the inherent value of the portfolio, the importance of these stores for the grocery operators and our ability to crystalise value as part of our capital recycling strategy.
"We remain focused on continuing to make good progress with our remaining strategic initiatives, including delivering further cost savings for the company, and we look forward to updating the market in due course.”