A UBS Asset Management (UBS-AM) long income UK real estate fund has invested £45m (€49m) to buy its first supermarket property.
UBS-AM said its Real Estate & Private Markets (REPM) business has acquired the asset, let to Sainsbury’s, in Leicestershire, for the UBS Long Income UK Property Fund (UBS-LIF Property, the Fund). The 105,000sqft asset in Hinckley is let to the supermarket chain on a long-term lease running to 2041.
The manager said the acquisition, which is fully in line with UBS-LIF Property’s investment strategy, further diversifies the tenant mix within the fund, while supporting its distribution yield and enhancing the portfolio’s weighted average unexpired lease term.
Gijsbert van Riemsdijk, head of transactions Europe ex CH at UBS-AM REPM, said: “This acquisition offered the opportunity for the fund to gain exposure to the UK’s supermarket sector. The move has proved particularly opportune against the backdrop of the sector’s resilience throughout the COVID-19-related volatility.”
The open-ended vehicle was set up in January last year to target alternative real estate assets. It targets a net income return of 5% per annum and offers investors the opportunity to access a portfolio of long-lease assets benefitting from indexed rental increases.
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