Highlights

  • Supermarket Income REIT completed GBP 40.9m of acquisitions at an average net initial yield of 6.4%.
  • The company entered the convenience grocery segment with the purchase of 10 Sainsbury’s stores for GBP 15.3m.
  • Following these deals, the company’s portfolio loan-to-value stands at 36% with a WAULT of 11 years.

Supermarket Income REIT plc (LSE:SUPR) has announced the completion of acquisitions totalling GBP 40.9 million, enhancing both earnings and the weighted average unexpired lease term (WAULT) of its portfolio. The purchases were concluded across two transactions, achieving an average net initial yield of 6.4%.

Following these latest acquisitions, the company has redeployed GBP 99.8 million of proceeds from its strategic joint venture with funds managed by Blue Owl Capital, which was announced in April 2025, at a blended net initial yield of 6.7%.

Acquisition of Tesco Craigavon Store

Supermarket Income REIT has acquired a Tesco supermarket in Craigavon, Northern Ireland, for GBP 25.6 million (excluding acquisition costs). The asset, which ranks in the upper quartile of Tesco’s portfolio, was purchased at an attractive net initial yield of 6.5%.

The property occupies an 8.6-acre site and includes a 130,000 sq ft omnichannel food store and a petrol filling station. The store operates as the primary omnichannel Tesco location within a 25-minute drive, offering home delivery services via 12 vans and Click & Collect options.

The site is secured under a 15-year triple-net lease with five-yearly, CPI-linked rent reviews (annually compounded and capped at 4% with a 0% floor). The rent is set at an affordable GBP 12.70 per sq ft.

Entry into Convenience Grocery Segment

In a move that marks its first step into the convenience grocery market, Supermarket Income REIT also acquired a portfolio of 10 Sainsbury’s convenience stores for GBP 15.3 million (excluding acquisition costs), reflecting a net initial yield of 6.1%.

The stores are leased directly from Sainsbury’s under 15-year triple-net leases with five-yearly, CPI-linked rent reviews (capped at 3% and floored at 1%). Each store has an average gross internal area of 5,800 sq ft and is located in high-footfall, densely populated areas across the UK.

The company identified small-format grocery properties as a growing opportunity, noting their attractive pricing and inflation-linked lease structures, which are consistent with those of large-format stores.

Portfolio Update and Leverage Position

Following the completion of these acquisitions, Supermarket Income REIT’s pro-forma loan-to-value (LTV) ratio stands at 36%, with a portfolio WAULT of 11 years.

The company stated that the new assets will contribute positively to earnings and enhance portfolio diversification, positioning Supermarket Income REIT to continue capturing opportunities in both large-format and convenience grocery markets across the UK.