Realty Income sees UK growth and cultivates industrial partners

US-based investor Realty Income is preparing to up its investment activity in the UK as it identifies $13bn (£10m) of opportunities. The firm, which debuted in the UK in April 2019 with the £429m acquisition of 12 Sainsbury’s supermarkets from British Land, has been steadily building its portfolio of net lease assets in the country. Realty Income, which released its Q2 update this week, now has a $1bn portfolio in the UK.  Over the first six months of 2020 it has bought a further six assets in the UK for a total of $223.7m, at an average yield of 5.3% and with a weighted average lease term of 11.8 years. President and chief executive Sumit Roy said that the UK continued to be a “very strong source of growth” for the business, and that the level of opportunities in the region were “well above” what it had originally anticipated. He said that when Realty Income first entered the UK it expected just one quarter of its acquisitions to be focused on the country, with 75% still being targeted on the US. Today that ratio has shifted to one third in the UK and two-thirds in its domestic markets, he said. Roy also revealed that the group was looking to increase its investment into industrial and said he had been making “concerted efforts to cultivate relationships with folks who could potentially provide us with product”. To send feedback, e-mail samantha.mcclary@egi.co.uk or tweet @samanthamcclary or @estatesgazette