Sainsbury’s buys back 13 of its freeholds
Sainsbury’s is buying back 13 freeholds from its Reversion Portfolio.
The portfolio was set up to hold 26 of Sainsbury’s freeholds and was jointly owned by Sainsbury’s, which had a beneficial interest of 49%, and a 50:50 joint venture between Supermarket Income REIT and the British Airways pension fund.
Sainsbury’s buyout of the 13 properties will be completed in March 2023 once current occupational leases expire.
Sainsbury’s is buying back 13 freeholds from its Reversion Portfolio.
The portfolio was set up to hold 26 of Sainsbury’s freeholds and was jointly owned by Sainsbury’s, which had a beneficial interest of 49%, and a 50:50 joint venture between Supermarket Income REIT and the British Airways pension fund.
Sainsbury’s buyout of the 13 properties will be completed in March 2023 once current occupational leases expire.
The price has yet to be determined, but will be based on the assumption of a new 20-year lease to Sainsbury’s with the initial rent set at the higher of passing or open market, subject to upward-only, five-yearly market rent reviews.
Sainsbury’s is also thought to be considering exercising an option to buy a further 10 stores from the portfolio next year.
Ben Green, director of Atrato Capital, the independent adviser to Supermarket Income REIT, said: “Sainsbury’s decision to buy back these stores is further evidence of the strength of demand for grocery property in the UK and also demonstrates the balance sheet strength of the supermarket operators. The exercise of this first tranche of options is expected to generate a positive NAV impact for Supermarket Income REIT.”
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