UBS Asset Management's (UBS-AM) Real Estate & Private Markets (REPM) business has completed the acquisition of a Sainsbury’s supermarket in Hinckley, Leicestershire, UK, for £45 mln (€50 mln).
The property was bought on behalf of the UBS Long Income UK Property Fund, and is let to Sainsbury’s on a long-term lease running to 2041.
Constructed in 2015, the asset comprises 105,000 sq ft (9,750 m2) of modern purpose-built supermarket accommodation, along with approximately 550 parking spaces on the 3.82 acre site. The property is let to the UK’s second largest supermarket brand on a long-lease, with an unexpired term of 21.4 years, subject to five-yearly uncapped RPI upwards-only rent reviews.
This 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 WAULT, the buyer said in a statement.
Gijsbert van Riemsdijk, head of Transactions Europe ex CH at UBS-AM Real Estate & Private Markets, commented: ‘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. Sainsbury’s represents an excellent covenant. The UK’s second largest supermarket brand aligns with the Fund’s strict long-lease tenant criteria, allowing us to distribute stable, long-term indexed cashflow to our investors.’
UBS-LIF Property targets a net income return of 5% p.a. and offers investors the opportunity to access a portfolio of long-lease assets benefitting from indexed rental increases.
GCW acted for UBS-AM and Cushman & Wakefield and Prime Retail acted for the vendor.
