Real estate investor Supermarket Income REIT (SUPR) announced it had gone on a spending spree this month, adding six new sites to its portfolio of stores for £113.1 million before acquisition costs.

The stores, which were acquired from different vendors, comprise a Tesco (TSCO) in Prescot, a pair of Morrison (MRW) sites in Durham and Workington, an Aldi in Oldham and a combined Aldi and M&S (MKS) Foodhall site in Liverpool.

The bulk of the spending went on the Tesco store, which cost £50 million and sits on a 7.5 acre site which houses an 89,000 square foot store, a 12-pump petrol station, almost 500 parking spaces and a purpose-built customer fulfilment centre to support online deliveries across the north west.

The two Morrison stores cost £47.3 million and cover more than 21 acres. The Durham site houses a 50,000 square foot store with several purpose-built loading docks for online delivery, 16-pump filling station and 475 parking spaces.

The Workington store, which was acquired from Land Securities (LAND) for 50% more than the Durham store, is on a larger site but houses a smaller store along with a petrol station, parking and adjoining outlets of B&M (BME), B&Q and Halfords (HFD).

The net initial yield across the five sites is 4.6% and each one has five-yearly upward-only rent reviews except the Tesco store which has annual CPI-linked reviews.

‘These acquisitions provide geographic and tenant diversification, with the purchase of our first M&S Foodhall, as well as exposure to a number of high-quality omnichannel supermarket assets’, said Ben Green, director of Atrato Capital which advices the trust.

‘With an aggregate weighted average unexpired lease term (WAULT) of 15 years, they support our strategy to deliver attractive long-term income’, Green added.


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Issue Date: 20 Sep 2021