Supermarket Income REIT (SUPR) has announced plans to raise approximately £50m through a new share issue to acquire 12 assets.
The assets will be acquired through six transactions for £65.2m at an average net initial yield of 7.3%. Two of the acquisitions are direct off-market deals with Sainsbury’s and comprise a portfolio of seven convenience grocery assets purchased for £19m.
The REIT is also acquiring a distribution centre in Darlington from Sainsbury’s for £47m in a sale and leaseback deal. The unit is sub-let to Argos, which uses it as its principal northern distribution warehouse. The asset is being acquitted by SUPR’s joint venture with funds managed by Blue Owl Capital.
SUPR also intends to acquire a scheme anchored by a small format grocery store in Woking let to Waitrose for £14.2m, a small format store in Essex let to Sainsbury’s for £5m and a convenience grocery asset in Surrey let to Tesco for £1.1m.
Rob Abraham, CEO of Supermarket Income REIT, said: “This latest equity raise reflects both the strong momentum we have built across the business and our continued confidence in the attractive investment opportunities ahead. Having successfully deployed the proceeds of our July fundraising, we are now capitalising on a further pipeline of high quality, earnings enhancing acquisitions.
“These assets will further diversify our portfolio across grocery operators, locations and asset types, while strengthening our income stream and supporting earnings growth. They represent another important step towards our ambition of doubling the size of the portfolio and delivering long-term returns for shareholders.”
