Supermarket Income REIT buys in Huddersfield
The real estate investment trust has acquired a 113,000 sq ft omnichannel Sainsbury’s supermarket for £49.7m, reflecting a net initial yield of 7.6%.
SI REIT described its newest asset as a “top quartile performing food store” made up of a 113,348 sq ft gross internal area omnichannel supermarket and a petrol filling station, situated on an 8.5-acre site.
Sainsbury’s has traded from the site for more than 30 years, and it is now also an online fulfilment hub for the operator with 12 home delivery vans and click & collect service.
The store is being acquired with an unexpired lease term of 11 years with annual RPI-linked rent reviews, subject to a 4% cap and a 0% floor.
The acquisition has been funded through the drawdown of existing debt facilities. Following the acquisition, the company’s loan-to-value is 39% with a portfolio-wide average unexpired lease term of 12 years.
SI REIT said ”we are now seeing heightened levels of competition for assets. This provides the Board with further confidence in property valuations”.
The Acquisition further increases the Company’s rental income from investment grade covenants and supports its strategy to pay a progressive dividend. The firm said its balance sheet remains robust, with £75m headroom remaining in its debt facilities.
Ben Green, principal of Atrato Capital, investment adviser to Supermarket Income REIT, said: “We remain highly focused on driving returns and we continue to explore all avenues to deliver value for shareholders of Supermarket Income REIT.”
