Supermarket Income buys Staffordshire Tesco store

Supermarket Income REIT has bought a Tesco supermarket in Stoke-on-Trent for £34.7m. The price paid for the Staffordshire store reflected a 7.5% net initial yield. The asset, which sits on an 8.7 acre site, is omnichannel and includes a petrol filling station. Its net sales area measures 54,451 sq ft. The store was built in 1994 and supports Tesco’s online fulfilment operation via both home delivery vans and customer click and collect. It is being acquired with an unexpired lease term of 11 years and is subject to annual RPI-linked rent reviews, with a 4% cap and 0% floor. The purchase was funded through the drawdown of an existing revolving credit facility. Separately, the REIT has entered into an amended investment advisory agreement with its adviser Atrato Capital and its alternative investment fund manager JTC Global to provide clarification for all parties in the event of a takeover, delisting or liquidation. The revised IAA will allow for a payment in lieu of written notice to the investment adviser following such an event, limited to the equivalent of the fees that would have been owed over the existing rolling two-year written notice period. That notice period was agreed in July 2021, in conjunction with a reduction in investment advisory fees. Supermarket Income said the amendments seek to reflect the “original commercial intentions” of the board and investment adviser.