Supermarket Income REIT, the investment fund that owns scores of UK supermarkets, has made its first convenience store acquisitions, buying 10 Sainsbury’s Locals.
The 10 stores in “high-demand areas across the UK” have been acquired for £15.3m, reflecting a net initial yield of 6.1%.
Supermarket Income REIT (SUPR) said it increasingly saw opportunity in the convenience space, where strong-trading stores could be acquired at attractive price.
The 20 Sainsbury’s were part of a batch of UK acquisition this week which also included a 130,000 sq ft Tesco store in Craigavon, Northern Ireland, for £25.6m, reflecting a net initial yield of 6.5%.
“We have a strong pipeline of large format omnichannel supermarkets, whilst we also see attractive relative value in smaller format convenience stores as demonstrated by our acquisition from Sainsbury’s,” said SUPR CEO Rob Abraham.
“Our relationship-led model and sector specialism continues to set us apart in the market, enabling us to unlock these unique opportunities and strategically scale the business.”
SUPR has also increased its presence in France, buying 20 Carrefour supermarkets for €123m, reflecting a net initial yield of 6.6.%
It now owns 46 Carrefour stores, having bought its first in April last year. It expects Carrefour to represent 10% of its gross asset value after deploying debt capacity into its current pipeline.
It said the latest 20 were strong-performing omnichannel stores, in line with its investment strategy.
“I am delighted that we have now taken our French exposure to scale through another direct sale and leaseback transaction with Carrefour as we continue to recycle capital into earnings enhancing opportunities that further diversify our portfolio,” said Abraham.
“SUPR is targeting a number of attractive UK pipeline transactions in the coming months, supporting the delivery of a fully covered and growing dividend over the long term.”
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