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Highlights:

  • SUPR acquires Tesco omnichannel supermarket in Ashford for GBP 54.1 million.
  • SUPR reports net initial yield of 7.0% on the newly acquired site.
  • SUPR begins redeployment of proceeds from joint venture with Blue Owl Capital.

Supermarket Income REIT plc (LSE:SUPR) has announced the acquisition of a Tesco-anchored omnichannel supermarket property in Ashford, Kent, for GBP 54.1 million, excluding acquisition costs. The transaction reflects a net initial yield of 7.0% and marks the company’s first acquisition using capital raised from its recently formed strategic joint venture with Blue Owl Capital.

The property comprises a 93,000 square foot store and a petrol filling station, located on an 8.2-acre freehold site. Tesco has operated from the premises for over three decades. The store supports both physical retail and online fulfilment operations and is equipped with 14 home delivery vans. It also includes a Click & Collect facility, highlighting the dual-format nature of the site. The asset is acquired with a remaining lease term of nine years. The lease includes annual rent adjustments linked to the Retail Price Index (RPI), capped at 5% and floored at 0%, providing inflation-hedged income for the company.

SUPR indicated that current market conditions offer favourable acquisition opportunities, particularly as supermarket property valuations remain at multi-year lows. The company sees the present stage of the real estate cycle as an inflection point where high-quality, long-lease, inflation-linked assets can be secured on accretive terms.

The Ashford acquisition is SUPR’s first deployment of capital following its recent strategic joint venture with funds managed by Blue Owl Capital. The joint venture is expected to provide additional financial flexibility to pursue SUPR’s investment pipeline, which includes a range of potential acquisitions across varying store formats and tenant profiles.

In its broader investment strategy, SUPR aims to maintain its sector focus while considering expansion into under-represented tenant categories. It also seeks to diversify across store types, including convenience, large-format, and fulfilment-led stores, without compromising on income quality. The company stated that all future acquisitions will be pursued with the goal of enhancing earnings and supporting a sustainable, fully covered dividend.

Rob Abraham, CEO of Supermarket Income REIT, said that the Tesco acquisition demonstrates progress in redeploying joint venture capital and that the site will contribute to earnings from day one. He added that the investment team continues to explore additional opportunities in line with the company’s long-term strategy of scaling its asset base and reinforcing its earnings profile.

SUPR trading at 1.36% higher at GBX 81.80 per share as on 14 july 2025.