Supermarket chain Sainsbury’s is buying back stores in a UK portfolio of supermarkets properties owned by a partnership between the British Airways pension fund and Supermarket Income REIT.

In May last year, British Airways Pension Trustees, trustee company for the British Airways pension fund has formed a 50:50 joint venture with Supermarket Income REIT to buy a 25.5% stake in the portfolio known as the Sainsbury’s Reversion Portfolio.

The joint venture invested a further £115m (€135m) in February this year to double its stake in the portfolio to 51% as it acquired a 25.5% stake from an Aviva Investors managed fund. Sainsbury’s held the remaining 49% stake in the £460m portfolio.

Supermarket Income REIT said Sainsbury’s has now exercised a purchase option to buy 13 stores within the portfolio. In addition, Sainsbury’s has a remaining purchase option to acquire a further 10 stores in the portfolio, which can be exercised between December 2021 and January 2022.

Ben Green, director of Atrato Capital, the Investment Adviser to Supermarket Income REIT, said: “Sainsbury’s decision to buy back these stores is further evidence of the strength of demand for grocery property in the UK and also demonstrates the balance sheet strength of the supermarket operators.

”The exercise of this first tranche of options is expected to generate a positive NAV impact for Supermarket Income REIT.”

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