Matthew Neville

Supermarket retailer acquires eight additional stores from real estate investment trust

Supermarket Income REIT plc (SUPR), the real estate investment trust, has announced an update in relation to its 50:50 joint venture with British Airways Pension Trustees Limited.

The JV has a 51 per cent beneficial interest in the Sainsbury’s reversion portfolio. The remaining 49 per cent beneficial interest is held by Sainsbury’s. The portfolio consists of the freeholds to 26 Sainsbury’s supermarkets.

The company has announced that Sainsbury’s has exercised its second purchase option (of two) to acquire eight stores within the portfolio. Sainsbury’s acquisition of the eight stores will be completed in July 2023 upon expiry of the current occupational leases.

The purchase price under the option is to be determined based on the assumption of a new 20-year lease to Sainsbury’s with the initial rent set at the higher of passing or open market, subject to upward-only, five yearly market rent reviews.

The exercise of this option is in addition to the first option exercised by Sainsbury’s onSeptember 10 2021 to acquire 13 stores within the portfolio, which will be completed in March 2023. In total, Sainsbury’s exercised its option to acquire 21 of the 26 stores in the portfolio.

Ben Green, director of Atrato Capital Limited, the investment advisor to Supermarket Income REIT plc, said: “Sainsbury’s buyback of these stores is further evidence of the strength of demand for grocery property in the UK.

“The exercise of these purchase options is expected to generate a positive NTA impact for Supermarket Income REIT.”

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