Supermarket REIT adds Yorkshire Sainsbury’s to shopping trolley

Supermarket Income REIT has bought a Sainsbury’s in Huddersfield, West Yorkshire, for £49.7m – a 7.6% net initial yield. The supermarket extends to 113,348 sq ft and includes a petrol filling station. Situated on an 8.5-acre plot, Sainsbury’s has traded from the site for more than 30 years. The store is an online fulfilment hub for the operator, with 12 home delivery vans and click and collect services. The store is being acquired with an unexpired lease term of 11 years with annual RPI-linked rent reviews (subject to a 4% cap and a 0% floor). The purchase has been funded through the drawdown of Supermarket REIT’s existing debt facility. Supermarket REIT said the deal was part of its strategy to grow earnings through a combination of accretive acquisitions, capital recycling and cost savings and comes amid a period of “significant strategic and operational development” for the company. The firm said it was also actively exploring opportunities to recycle capital opportunistically through individual asset sales and potential joint ventures. Depending on market conditions, proceeds from asset sales or a joint venture transaction could be recycled into more accretive assets, used to reduce debt or for share buybacks, said the group. Ben Green, principal at Atrato Capital, investment adviser to Supermarket Income REIT, said: “The team has been, and remains, incredibly active across a range of strategic and operational developments, all driven by our focus on delivering value for shareholders. “We remain highly focused on driving returns, and we continue to explore all avenues to deliver value for shareholders of Supermarket Income REIT.” Photo by Jochen Tack/imageBROKER/Shutterstock