Supermarket Income REIT has bought four stores for £76.4m in Cheltenham, Merseyside and Glasgow.
The acquisitions reflected a blended 5.1% net initial yield. The deals were partly funded by a £412m overdraft facility with an all-finance cost of 3.4%.
Acquired from different vendors, the purchases consisted of two Tesco supermarkets located in Cheltenham and Merseyside, as well a Sainsbury’s supermarket and an M&S Foodhall on a central Glasgow site.
The Tesco in Bishops Cleeve, Cheltenham, has a 29,501 sq ft net sales area and is located on a 4-acre site with 245 car parking spaces. The store is being acquired with an unexpired lease term of 12 years and is subject to annual RPI-linked rental uplifts (subject to a 5% cap and a 0% floor).
The second Tesco, in Newton-le-Willows, Merseyside, has a 22,298 sq ft net sales area supermarket on a 2.9-acre site with 172 car parking spaces. It has an unexpired lease term of 12 years and is similarly subject to annual RPI-linked rental uplifts.
The city centre Glasgow site comprises a 16,893 sq ft net sales area Sainsbury’s supermarket with an unexpired lease term of 10 years and an M&S Foodhall with an unexpired lease term of four years, both subject to five-yearly, upwards only, open-market rent reviews.
Adjoining the Sainsbury’s and M&S Foodhall are further stores providing local health and convenience services, with tenants including Boots, Superdrug and Costa Coffee.
The deal marks the third M&S in the REIT’s portfolio, while those adjoining spaces will boost the owner’s non-grocery exposure, which is below 10% of the overall portfolio by value.
Ben Green, director of Atrato Capital, the investment adviser to Supermarket Income REIT, said: “These acquisitions provide further diversification to the company’s growing portfolio.”
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