Supermarket Income buys €60m Tesco supermarket at 5.1% yield

UK REIT Supermarket Income has announced the acquisition of a Tesco Extra supermarket in the north Lincolnshire town of Scunthorpe, England, from Legal and General Pensions for £53 mln (€60 mln), reflecting a net initial yield of 5.1%.

Developed in 2002, the store totals 98,000 sq ft (9,100 m2) on an 8-acre site with more than 580 parking spaces, an 8-pump filling station and dedicated online fulfilment distribution docks.
The store is being acquired with an unexpired lease term of 22 years with annual, upward-only, RPI-linked rent reviews. The UK REIT is funding the purchase from the proceeds of its £65 mln equity placing carried out earlier in May.
Ben Green, director of Atrato Capital, the investment adviser to Supermarket Income REIT, said: 'We are delighted to continue our track record of rapidly deploying our capital in high-quality, omni-channel supermarkets. This store has an impressive trading record on site and plays an important role in Tesco’s online fulfilment network. This investment is a strong addition to our growing portfolio, increasing both the weighted average unexpired lease term and net initial yield of the company’s portfolio.'


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