Supermarket Income REIT PLC (LSE:SUPR, OTC:SUPIF) has announced the acquisition of a number of retail locations, alongside a new £412.1 million credit facility.
In Chineham, Basingstoke, the investment company bought a Tesco supermarket as well as an M&S Foodhall and an Iceland. Meanwhile, in Doncaster, it acquired an ASDA supermarket.
The transactions have a combined purchase price of £82.9 million and, according to the company, will have a combined net initial yield of 4.9%.
The Chineham site is approximately 18.7 acres and alongside the retail space is a 16-pump service station and 878 parking spaces. The Tesco hypermarket still has 12 years on its lease and is subject to five-year open market rent reviews.
In Doncaster, the ASDA site covers 5.2 acres. An ASDA supermarket has been in operation on the site since the 1970s and the store was refurbished in 2019. It was acquired under a sale-leaseback agreement, starting a new 100-year lease, subject to a five-year rent review.
Supermarket REIT, meanwhile, has put in place a £412.1m loan facility – comprising a five-year £250m revolving credit facility, a £100m loan on three years and an 18-month loan of £62.1million.
It is being used to refinance £255 million of previous borrowings, as well as fund the continued growth of the business.
“These acquisitions further strengthen and complement SUPR’s portfolio,” said Ben Green, Principal of Atrato Capital, investment advisor to Supermarket Income REIT.
“Chineham Park was a rare opportunity to acquire a Tesco, an M&S Foodhall and an Iceland in one transaction. The Asda acquisition represents the longest-lived asset in the portfolio with a very long lease of 100 years.
“The new unsecured facility is a significant milestone for SUPR, as the breadth and quality of the portfolio now allows the company to finance itself on an unsecured basis.
“We are delighted with the level of financial support received from our existing and new relationship banks, affirming the robust nature of the grocery sector.”