Two Slate Asset Management entities are acquiring a $425m (€404m) grocery-anchored real estate portfolio in the US as part of a newly created partnership.

Slate Grocery REIT said it has agreed to acquire the portfolio of 14 properties and has also formed a joint venture with Slate North American Essential Real Estate Income Fund (NA Essential Fund).

As part of the venture, the New Zealand Superannuation Fund-backed NA Essential Fund will make an initial $180m investment through the purchase of partnership interests in two Slate Grocery REIT subsidiaries.

NA Essential Fund’s investment will be used to fund Slate Grocery REIT’s acquisition of the 2.5m sqft grocery-anchored real estate portfolio.

The portfolio being acquired is located across seven states with over two-thirds of the portfolio value being allocated to the Southeastern US. TSX-listed Slate Grocery REIT said the acquisition significantly increases its exposure to the Florida, North Carolina, and Georgia markets.

Upon completion of the investment, the NA Essential Fund will own an 18.4% interest in the Slate Grocery REIT’s existing assets, through its approximately 18.4% ownership interest in the joint venture.

Slate Asset Management said new properties to be acquired by the Slate Grocery REIT will be acquired through the joint venture unless the NA Essential Fund does not participate.

“This acquisition and joint venture illustrate the value and resources Slate Asset Management brings to all of our managed entities,” said Blair Welch, CEO of Slate Grocery REIT and founding partner of Slate.

“Our global reach and track record facilitate these creative solutions for capital and deals that enable the REIT’s continued growth and ensure we are providing the best value to the REIT’s unitholders.

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