UK vehicle Supermarket Income REIT has acquired a Sainsbury’s omnichannel supermarket in Huddersfield, West Yorkshire, for a total purchase price of £49.7 mln (€59 mln), reflecting a net initial yield of 7.6%.
The firm describes the asset as a 'top quartile performing food store', comprising a 113,348 ft2 (10,500 m2) gross internal area omnichannel supermarket and a petrol filling station, situated on an 8.5 acre (3.44 ha) site. Sainsbury’s has traded from the site for over 30 years.
The store is an online fulfilment hub for the operator with 12 home delivery vans and click & collect services. The store is being acquired with an unexpired lease term of 11 years with annual RPI-linked rent reviews (subject to a 4% cap and a 0% floor).
According to Supermarket Income, the acquisition has been funded through the drawdown of the company's existing debt facility. Following the deal, the company’s LTV is 39% with a portfolio WAULT of 12 years.
The firm described the asset as representing 'attractive value at pricing agreed earlier in the year'. It commented: 'We are now seeing heightened levels of competition for assets. This provides the board with further confidence in property valuations.'
Supermarket Income recently announced it would be actively exploring the recycling of capital through individual asset sales and potential joint ventures at attractive valuations.
It is also planning a secondary listing on South Africa's JSE in response to demand for its shares from local investors.
Ben Green, principal of Atrato Capital, the investment adviser to Supermarket Income REIT, said:? 'The team has been, and remains, incredibly active across a range of strategic and operational developments, all driven by our focus on delivering value for shareholders.
'We are pleased that shareholders will have the ability to vote on two proposals – to make further improvements to the cost base and to provide greater flexibility for accretive acquisitions – at the upcoming AGM.
'We are also very pleased to announce this UK acquisition. We remain highly focused on driving returns and we continue to explore all avenues to deliver value for shareholders of Supermarket Income REIT.'
