Supermarket Income REIT PLC (LSE:SUPR, OTC:SUPIF) said it has acquired four supermarkets from different vendors for a total of £76.4mln, excluding acquisition costs, using its new credit facility.
The four new additions reflected a combined net initial yield of 5.1%, the FTSE 250-listed investment trust said.
Last month, the company revealed it had arranged a new £412.1mln unsecured credit facility, which has a margin of 1.5% above SONIA, currently equivalent to an all-in finance cost of 3.4%.
Two of the sites are housing Tesco supermarkets on 12-year leases: one of 29,500 sq ft in Bishops Cleeve, Cheltenham, and the other in Newton-le-Willows, Merseyside at 22,298 sq ft. Both are subject to annual RPI-linked rental uplifts subject to a 5% cap and a 0.0% floor.
The other two sites are in Glasgow, where Sainsbury’s is the tenant of a 16,893 sq ft supermarket with an unexpired lease term of 10 years, next door to a M&S Simply Food with an unexpired lease term of four years. Both are subject to five-yearly, upwards only, open market rent reviews.
Adjoining the Sainsbury’s and M&S stores in Glasgow, the investment said there are further units providing local health and convenience services that are occupied by tenants including Boots, Superdrug and Costa Coffee.
These add to existing non-grocery assets that represent less than 10% of the overall portfolio by value.
The four supermarket acquisitions “provide further diversification to the company's growing portfolio,” said Ben Green, director of Atrato Capital, the trust's investment adviser.
“The strong trading M&S Foodhall adds a third M&S to SUPR's portfolio and we are pleased to be taking on the adjoining non-grocery tenants in Glasgow.”