Supermarket Income REIT PLC (LSE:SUPR, OTC:SUPIF) is taking full control of its management, ending its external advisory arrangement with Atrato Group.
The decision will see the company internalise its management for £19.7 million, funded from the recent sale of a Tesco store in Newmarket.
The move is expected to generate at least £4 million in annual cost savings and improve earnings and dividend growth.
The board sees this as the best use of capital, delivering higher returns than share buybacks or new property purchases. It also aligns the company’s leadership more closely with shareholder interests and provides greater strategic flexibility.
As part of the transition, key Atrato staff will join Supermarket Income REIT.
Rob Abraham, currently fund manager at Atrato, will become CEO, while finance director Mike Perkins will take on the role of CFO.
Both have extensive experience in real estate and investment management and will ensure continuity.
Atrato will provide transition services for up to nine months after completion, with the internalisation expected to take effect by 25 March.
The board will put the decision to a voluntary shareholder vote, and if approved, the company will move its stock market listing to a new category that could broaden its investor base and reduce administrative requirements.
Chair Nick Hewson said: "SUPR is of a scale and maturity where we believe an internalised structure is appropriate as the company moves into the next phase of its growth.
"Alongside the other strategic initiatives that we have undertaken in recent months, it will reduce costs and deliver sustainable and growing earnings."