Supermarket Income REIT has acquired six grocery properties for £104m, fully deploying the proceeds of an equity raise it completed earlier this year.
The company said the portfolio, together with three supermarkets it agreed to buy in July for £118m, had used up the £100m it raised from shareholders that month.
The combined purchases were made at an average net initial yield of 6.6% and carry a weighted average unexpired lease term of 10 years.
The latest assets include Sainsbury’s and Morrisons supermarkets in Macclesfield and Leeds, both on 13-year leases and offering click-and-collect and home delivery; an M&S-anchored retail park in Nottinghamshire; smaller stores let to the Co-op and M&S; and a Sainsbury’s grocery distribution centre in Avonmouth on a 14-year lease.
Most of the properties carry inflation-linked rents.
Rob Abraham, CEO of Supermarket Income REIT, said: “These acquisitions add six high-quality grocery assets to our portfolio, marking the completion of the deployment of the proceeds of our £100 million equity raise in July. We are pleased to have delivered this compelling pipeline of acquisitions within two months. Importantly, these acquisitions represent further progress in our strategy to diversify the portfolio, adding grocery distribution and additional exposure to grocery-anchored retail, to our core UK foodstores, which span larger, omnichannel supermarkets through to convenience.”
This is an interesting trust, with foundations in the backbone of UK retail and a yield of 7.5%. An improvement in sentiment around the UK will provide shares with a boost – not that it’s a wildly volatile trust.