Supermarket Income announced the acquisition of a 90k sq ft. Tesco Extra supermarket in Mansfield, Nottinghamshire, from Charities Property Fund (CPF) for £45.0m, reflecting a net initial yield of 5.2%. The acquisition consists of £33.7m in cash, as well as the issue of 10,922,330 Supermarket Income new ordinary shares at 103p per share to CPF.
Net yield on the acquisition to Supermarket Income will be 5.3%, as the issue price constitutes an 8% premium to the prevailing net asset value per share. The site, which includes 530 parking spaces and a 12-pump petrol filling station, will be acquired with an unexpired 20-year lease term with annual, upward-only, RPI-linked rent reviews. The next rent review is in March 2020.
Ben Green, Investment Adviser to Supermarket, said: “This acquisition increases both the average unexpired lease term and the net initial yield of our portfolio. We believe there are many investors who own individual supermarket properties that would benefit from swapping their ownership into shares in Supermarket Income REIT, gaining our diversification and specialist management.”