Newly formed UK company Supermarket Income REIT has announced plans to raise £200 mln (€227 mln) via an initial public offering (IPO) on the specialist fund segment of the London Stock Exchange's main market.
The IPO proceeds will be used to acquire a diversified portfolio of supermarket real estate assets in the UK, with a focus on large, institutional grade tenants and the potential for capital growth through active asset management.
'The supermarket sector currently represents a compelling real estate opportunity. Supermarkets provide secure, long-term income combined with the potential for substantial capital growth,' commented Nick Hewson, chairman of Supermarket Income REIT.
The company intends to become a real estate investment trust (REIT), once it has completed the acquisition of the initial portfolio. To date, it has lined up around £263 mln (€298 mln) of Tesco and Sainsbury's stores at a net initial yield of 4.9%.
Hewson also said that they had a identified a further pipeline of assets with an expected value of approximately £251 mln (€285 mln). The fund has entered initial discussions with the vendors of these assets and said it could look to acquire them offmarket over the short to medium term.
The company is targeting an initial dividend yield of 5.5%.
Supermarket Income REIT will be managed by JTC Global AIFM Solutions and advised by Atrato Capital.
Stifel Nicolaus Europe is acting as sole bookrunner, placing agent and financial adviser.
