Six new grocery assets, including a Sainsbury's distribution hub, round off a rapid deployment of July's £100m equity raise.
Supermarket Income REIT (LSE: SUPR) has bought six grocery properties for £104m, the trust confirmed, completing the deployment of proceeds from a £100m equity raise it closed just two months ago in July.
No share price reaction was disclosed in the announcement, but the deal underscores the pace at which management has been able to put shareholder cash to work, with the latest purchases following hard on the heels of three supermarkets acquired in July for £118m.
Together, the two tranches of acquisitions were struck at a blended net initial yield of 6.6%, with leases averaging ten years unexpired. The new portfolio spans a mix of formats: Sainsbury's and Morrisons supermarkets in Macclesfield and Leeds on 13-year leases, both offering click-and-collect and home delivery; an M&S-anchored retail park in Nottinghamshire; smaller units let to the Co-op and M&S; and, notably, a Sainsbury's grocery distribution centre in Avonmouth let for 14 years. Most of the rents are linked to inflation, a feature that continues to underpin the appeal of grocery property to income-focused investors.
Chief executive Rob Abraham said the acquisitions extend the REIT's strategy of diversifying beyond its core base of large omnichannel supermarkets and convenience stores, adding exposure to grocery distribution infrastructure and grocery-anchored retail parks. He described the ability to source and complete this pipeline within two months as a key achievement.
Supermarket Income REIT currently yields around 7.5%, and commentary suggests the shares are not typically volatile, with any re-rating more likely tied to broader sentiment towards UK equities than to individual deal news. Investors will now watch whether management pursues further capital raises to fund additional acquisitions or opts to consolidate the enlarged portfolio, particularly the newly acquired distribution and retail park assets, which mark a shift from its traditional supermarket-only focus.
This report is based on Supermarket Income REIT’s announcement and coverage by UK Investor Magazine. Company announcements can be tracked via London Stock Exchange RNS and Investegate, and the full results calendar is worth watching for the next update.
This article is for general information only and does not constitute investment advice or a recommendation to buy or sell any security. Photo: Eva Wilcock on Unsplash.
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