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Supermarket Income REIT adds Sainsbury's in Preston to its burgeoning portfolio

The net initial yield on the new store is 5.1% based on the purchase price.

Supermarket Income Reit PLC - Supermarket Income REIT adds Sainsbury's in Preston to its burgeoning portfolio
Preston store is 78,000 sq ft

Retail property specialist Supermarket Income Reit PLC (LON:SUPR) has acquired J Sainsbury PLC's (LON:SBRY) main outlet in Preston for £54.4mln.

The acquisition increases SUPR’s portfolio to eight supermarkets, two of which are occupied by Sainsbury’s, five by Tesco and one by Morrison’s.

As well as 78,000 sq ft of sales space, the ten-acre site has purpose-built online fulfilment distribution docks to support Sainsbury's online grocery business across the region.

This omnichannel feature is a key consideration for the REIT when it looks to acquire properties.

The net initial yield on the new store is 5.1%.

Supermarket Income is buying the site on an unexpired lease term of 22.5 years with annual, upward-only, RPI-linked rent reviews (subject to a 4% cap and 1% floor). 

The company has also arranged a new five-year, interest-only £47.6mln term loan facility with Dekabank at a total cost of 2.0%. 

Ben Green, a director of Atrato Capital, the REIT’s investment adviser, said: "This Sainsbury's supermarket is a great addition to our growing portfolio of omnichannel stores.”

“The property has very attractive lease terms, strong fundamentals and provides further diversification to the portfolio.”

Quick facts: Supermarket Income Reit PLC

Price: 107.5 GBX

LSE:SUPR
Market: LSE
Market Cap: £363.21 m
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Supermarket Income REIT expands fundraise and portfolio with new Sainsbury’s...

Steve Windsor and Steven Noble from Atrato Capital, Supermarket Income Reit PLC's (LON:SUPR) investment adviser, speak to Proactive London's Andrew Scott following the acquisition of its third property where Sainsbury’s is the tenant. The trust has bought the supermarket chain’s store in...

on 18/10/19

2 min read