Supermarket Income REIT and joint venture partner Blue Owl Capital have acquired 10 Asda supermarkets in a £196m sale and leaseback deal.
Supermarket Income REIT is contributing £98m towards the acquisition of the stores, which are on 25-year leases, subject to annual CPI-linked rent reviews (capped at 4%) and generating low average rents of £19.90/sq ft.
The portfolio of Asda stores was selected from an original basket of 20 stores and comprises upper quartile omni-channel stores with an average gross internal area of 78,000 sq ft.
Alongside the Asda acquisition, Supermarket Income REIT has also agreed to transfer five of its directly owned assets into the joint venture at a value of £232m, subject to due diligence.
Through its JV stake, the REIT will retain a 50% interest in the assets and benefit from an annual management fee of 0.6% GAV on its JV partner’s 50% share of the five assets, in addition to the management fee it currently receives from the £403m seed portfolio.
SUPR said it has a further circa £100m of assets in exclusivity, which it hopes to close by the end of the calendar year.
Rob Abraham, CEO of Supermarket Income REIT, said: “These transactions further demonstrate our ability to deliver on our strategy, as we continue to successfully drive returns for our shareholders. Working closely with Blue Owl, we are pleased to have increased the scale of the JV through the addition of these top quartile Asda stores and the expected transfer of five existing stores.
“Looking ahead, we have further financing capacity to scale both our business and the JV portfolio. All of our activity over the last nine months has been focused on delivering earnings growth for our investors and I look forward to updating the market on our progress, as we continue to focus on investing in mission critical grocery real estate to deliver a fully covered and growing dividend.”
