UK grocery real estate investment trust Supermarket Income REIT (SUPR) is selling its interest in a portfolio of supermarket properties to its joint venture partner Sainsbury’s for £430.9m (€488.8m).

The London-listed firm said it has agreed to sell its Sainsbury’s Reversion Portfolio (SRP) stake to the supermarket chain.

In January, SUPR bought British Airways Pension Trustees Limited’s (BAPTL) 25.5% stake in a partnership that held half of the UK portfolio of supermarket properties.

The deal gave SUPR a 51% stake in the SRP portfolio alongside supermarket Sainsbury’s, which held the remaining 49% interest in the 26-asset portfolio. Sainsbury’s was expected to buy 21 of the properties in two tranches in March 2023 and July 2023.

SUPR said the latest sale completes the previously announced acquisition by Sainsbury’s of 21 of the 26 SRP properties and concludes the contractual unwind of the SRP portfolio structure.

The net proceeds are expected to be used to reduce the SUPR’s existing debt facilities, the company said.

Ben Green, director of Atrato Capital, the investment adviser to Supermarket Income REIT, said: “This investment has been highly accretive for our shareholders and is further evidence of the long-term strength and value of UK grocery property.”

Patrick Dunne, director of group property, in charge of facilities management and procurement at Sainsbury’s, said: “We are pleased to have reached a positive outcome to conclude our joint venture and look forward to continuing to work with Supermarket Income REIT in the future.”

SUPR and BAPTL first formed the 50:50 joint venture in May 2020 to acquire British Land’s 25.5% stake in the SRP portfolio for £102m. The joint venture again in February 2021 acquired a further 25.5% stake in the portfolio from Aviva for £115m.

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