US-based Realty Income Corporation has made its first international property acquisition, agreeing a £429m (€381.2m) deal to buy 12 UK superstores from a British Land and J Sainsbury joint venture.

As part of the transaction, Realty Income said a sale-leaseback transaction with Sainsbury’s includes annual rent increases over the duration of the lease term and carries a weighted average lease term of approximately 15 years.

Sumit Roy, president and CEO, said the deal, which includes long-term net lease agreements with Sainsbury’s, represents a natural evolution of Realty Income’s strategy.

“We believe that the size of the European net lease market and a need for a large-scale, well-capitalised institutional real estate partner creates a very propitious environment for us to increase our addressable market.

“Our company is ideally positioned to pursue these additional growth avenues in Europe given our position as the leader in the net lease industry, sector-leading cost of capital, and ability to complete large-scale sale-leaseback transactions without creating tenant or industry concentration issues,” Roy said.

British Land, which will receive gross proceeds of £193.5m, from the disposal, said the sale is part of its long-term strategy to build an increasingly mixed-use business focused on three core elements: campus focused London offices; a smaller, refocused Retail business and residential.

“As part of this, we expect retail to comprise 30-35% of the assets of our business, down from around half today,” the London listed property firm said.

Following the latest disposal, British Land now has 6 standalone stores remaining.