Supermarket Income REIT buys Mansfield Tesco

Supermarket Income REIT has acquired a Tesco Extra supermarket in Mansfield, Nottinghamshire, from the Charities Property Fund, partly financed by issuing shares to the fund. The £45m deal included £33.7m in cash from the proceeds of the REIT’s £45m equity placing on 22 March and the issue of 10,922,330 new ordinary shares in the company to the CPF for 103p per share. This issue price represented an 8% premium to net asset value per share. The REIT said that the fund had agreed “various restrictions on any disposal” of the shares over the next 12 months. The Tesco Extra acquisition reflected a net initial yield of 5.2% and is let on an unexpired lease term of 20 years with annual, RPI-linked rent reviews. The site, which measures nine acres, was developed in 2007 and comprises a 90,000 sq ft supermarket, 530 parking spaces and a 12-pump petrol filling station. Ben Green, director of Atrato Capital, the REIT’s investment adviser, said: “This acquisition increases both the average unexpired lease term and the net initial yield of our portfolio. “We are especially pleased to have been able to use Supermarket Income REIT shares as part consideration in a property acquisition for the first time. “We believe there are many investors who own individual supermarket properties that would benefit from swapping their ownership into shares in Supermarket Income REIT, gaining our diversification and specialist management.” To send feedback, e-mail pui-guan.man@egi.co.uk or tweet @PuiGuanM or @estatesgazette