The UK's Supermarket Income REIT has acquired four grocery stores in the UK for a total purchase price of £82.9 mln (€96 mln), excluding costs, reflecting a combined net initial yield of 4.9%.
The deals include a Tesco superstore, M&S Foodhall and an Iceland in Chineham, Basingstoke, and the acquisition of an Asda supermarket in Carcroft, Doncaster,
The 18.7 acre (75,600 m2) Chineham site has been acquired from Tellon Capital and comprises a 60,938 ft2 (5,600 m2) net sales area Tesco superstore with a large omnichannel operation, a 16-pump petrol filling station and 878 parking spaces.
The store is an online hub for Tesco, operating 13 home delivery vans and a dedicated Click & Collect facility in the car park. The property also includes an M&S Foodhall, Iceland and further complementary non-food tenants. The Tesco store has a remaining lease term of 12 years and is subject to 5-yearly open market rent reviews.
The Asda store in Carcroft comprises a 45,813 ft2 net sales area omnichannel supermarket which sits on a 5.2 acre site and includes 340 parking spaces.
Asda has operated from the site since the 1970s with the store being fully refurbished in 2019. The store supports Asda’s online fulfilment in the area through Click & Collect.
The property was acquired via a direct sale and leaseback transaction with Asda under a new 100 year lease. The property is subject to 5-yearly rent reviews which are upwards only and CPI-linked.
Furthermore, the firm has arranged a new £412.1 mln unsecured credit facility with a bank syndicate comprising Barclays, Royal Bank of Canada, Wells Fargo and Royal Bank of Scotland International. This is the first time the company has accessed unsecured debt financing.
The facility consists of three tranches, namely a £250 mln five year revolving credit facility; a £100.0 mln three year term loan; and a £62.1 mln eighteen month term loan.
The facility has a margin of 1.5% over the Sterling overnight index average and a weighted average term of 6 years. It will be used in part to refinance £255 mln of existing secured commitments in addition to providing further debt capital to continue to fund the growth of the company.
The firm was advised on the new debt facility by Rothschild & Co.
Ben Green, director of Atrato Capital, the investment adviser to Supermarket Income, said: 'These acquisitions further strengthen and complement SUPR’s portfolio. Chineham Park was a rare opportunity to acquire a Tesco, an M&S Foodhall and an Iceland in a single transaction. The Asda acquisition represents the longest duration asset in the portfolio with a very long 100 year lease.
'The new unsecured facility is a significant milestone for SUPR, the scale and quality of the portfolio now enabling the company to finance on an unsecured basis. We are delighted with the level of financing support received from our existing and new relationship banks, affirming the robust nature of the grocery sector.'
