Supermarket Income buys Tesco store in Worcester

Supermarket Income REIT has bought a Tesco supermarket in Worcester from British Steel Pension Fund. The store was sold for £38.3m excluding acquisition costs, with the deal reflecting a 6% net initial yield. Tesco has operated the 6.5-acre site for more than 30 years. The site comprises a 47,297 sq ft net sales area supermarket, a petrol filling station and 515 car parking spaces. The store is also an online hub for Tesco, operating nine home delivery vans and a click-and-collect facility. It has an unexpired lease term of 12 years, with annual upwards-only RPI-linked rent reviews (subject to a 4% cap). The acquisition is being funded from the first tranche of sales proceeds of the company’s stake in the Sainsbury’s reversion portfolio. Ben Green, director at Atrato Capital, the investment adviser to Supermarket Income REIT, said: “This acquisition further strengthens SUPR’s portfolio of top trading omnichannel supermarkets, evidencing our ability to redeploy the proceeds of the SRP sale at yields which are accretive to the portfolio.” To send feedback, e-mail pui-guan.man@eg.co.uk or tweet @PuiGuanM or @EGPropertyNews