Principal Real Estate has acquired a supermarket in Portugal for its open-ended long-income euro-zone fund.

The real estate arm of Principal Global Investors said it has acquired the €10.2m asset, in Setubal to the south of Lisbon, on behalf of the Principal Eurozone Durable Income Fund (PEDIF).

The 2,700sqm supermarket is let on a long-term 15-year lease to Continente, which is part of Portugal’s food retailer, Sonae.

Robert Leadbetter, fund manager of the Principal Eurozone Durable Income Fund, said: “Grocery retail real estate has been one of the stand-out asset types during the pandemic, providing investors with stable, typically long-term, income on inflation-linked leases, backed up by robust performance from the underlying essential retail occupiers.

“Viewed against the current economic backdrop of high inflation and rising interest rates, this is exactly the type of asset we’re looking for to complement PEDIF’s investment strategy.”

PEDIF was developed to provide institutional investors with access to long lease real estate investments in Europe, targeting commercial real estate assets across sectors with leases of at least 14 years fixed term, located throughout the Euro area, with a weighting towards Germany, Benelux and France.

To read the latest edition of the latest IPE Real Assets magazine click here.