Supermarket Income links with US partner for £1bn JV drive
Supermarket Income REIT has formed a joint venture with US asset manager Blue Owl Capital, with plans to grow a £1bn portfolio portfolio.
The 50-50 JV has been seeded with a £403m portfolio comprising eight Morrisons, Sainsbury’s and Tesco supermarkets from the REIT’s existing portfolio, which have been transferred into the JV at a 3% premium to book value and with an average net initial yield of 6.6%.
As well as a net cash consideration of £200m, Supermarket Income will receive a management fee of 0.6% per annum of the gross asset value for the management of Blue Owl’s interest.
Supermarket Income REIT has formed a joint venture with US asset manager Blue Owl Capital, with plans to grow a £1bn portfolio portfolio.
The 50-50 JV has been seeded with a £403m portfolio comprising eight Morrisons, Sainsbury’s and Tesco supermarkets from the REIT’s existing portfolio, which have been transferred into the JV at a 3% premium to book value and with an average net initial yield of 6.6%.
As well as a net cash consideration of £200m, Supermarket Income will receive a management fee of 0.6% per annum of the gross asset value for the management of Blue Owl’s interest.
Supermarket Income will use the proceeds to pay down debt and invest in other supermarkets either directly or indirectly through the JV.
Robert Abraham, chief executive of Supermarket Income REIT, said: “The JV with Blue Owl’s managed funds brings a high quality, strategic capital partner that shares our conviction in the value of high yielding UK supermarkets. With the potential to grow to £1bn over the coming years, the JV partnership represents Blue Owl’s managed funds’ first major investment in the UK grocery space and is a strong endorsement of the expertise and track record SUPR has established in this market.
“For our shareholders, the JV is another important milestone in our strategy to recycle capital and grow earnings, and provides a platform for growth with specialist third party capital.”
Marc Zahr, co-president and global head of real assets at Blue Owl, said: “We see an opportunity to generate attractive returns from these assets, which are underpinned by the growing and highly resilient UK grocery sector.”
Photo by Amer Ghazzal/Shutterstock
