REG - Supermarket Inc REIT - SUPR scales joint venture through sale & leaseback

Supermarket Income REITAnnouncement

20/11/2025 07:00

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RNS Number : 2890I  Supermarket Income REIT PLC  20 November 2025

20 November 2025

SUPERMARKET INCOME REIT PLC 

(the "Company" or "SUPR") 

 

SUPR scales joint venture through a direct sale and leaseback

 

·    £196 million acquisition of 10 omnichannel Asda supermarkets by
joint venture with Blue Owl Capital Managed Funds

·    Agreed terms for the transfer of £232 million of SUPR assets into
the joint venture

 

Supermarket Income REIT plc (LSE: SUPR, JSE: SRI), announces an update on its
joint venture (the "JV") with funds managed by Blue Owl Capital ("Blue Owl").

 

The JV has acquired 10 omnichannel Asda supermarkets in a sale and leaseback
transaction for £196 million (SUPR's share: £98 million). The handpicked
portfolio of strong omnichannel stores has an average gross internal area of
78,000 sq. ft. and generates significant sales volumes from within highly
desirable catchment areas. The Company has also agreed terms for the transfer
of five of its existing assets into the JV at a value of £232 million,
subject to due diligence. The transfer of these assets to the JV is expected
to occur by 31 December and further details will be provided following
completion.

 

The transactions are in line with SUPR's strategy of deploying capital into
highly attractive and accretive opportunities that have significant strategic
benefits(1):

 

 ·         Scaling and diversifying the JV to £833 million and comprising 23 assets
 ·         Recycling some lower yielding assets and redeploying into strong performing,
           higher yield stores, enhancing EPS
 ·         Extending SUPR's weighted average unexpired lease term ("WAULT") by 0.7 years
           to 12 years
 ·         Providing market evidence of valuations on a further £232 million of the
           portfolio; transacting 3% above book value (as at 30 June 2025)
 ·         Enhancing fee income generated from the JV by £0.8 million

 

Asda acquisition

 

The JV has agreed to purchase a portfolio of 10 high-performing omnichannel
supermarkets from Asda for a total purchase price of £196 million (excluding
acquisition costs) at a net initial yield ("NIY") of 7.4% (Cap Rate of 7.9%)
(the "Asda Acquisition"). The Company will be contributing £98 million
towards the Asda Acquisition, reflecting its 50% stake in the JV.

 

Following a competitive sale and leaseback process, the stores are being
acquired with attractive 25-year leases, annual CPI-linked rent reviews
(subject to a 4% cap and 1% floor) and low, affordable passing rents averaging
£19.90 per sq. ft. In respect of these stores, given the long lease nature of
the Asda assets, asset management responsibilities will be shared between the
JV partners whilst SUPR will manage finance administration and reporting.

 

The portfolio of Asda stores was selected from an original basket of 20 stores
and is being acquired via a direct sale and leaseback. It comprises upper
quartile omnichannel stores with an average gross internal area of 78,000 sq.
ft., which support online fulfilment and Click & Collect services. The
selected assets have undergone extensive due diligence and underwriting by the
JV at both the store and operator level with all stores showing significant
sales volumes and strong catchment populations, as well as being fundamentally
underpinned by a strong alternative use case for a range of occupiers.

 

Transfer of SUPR assets into the JV

 

Alongside the Asda Acquisition, SUPR has reached an agreement to transfer five
of its directly owned assets into the JV, subject to due diligence. The assets
would be transferred at a value of £232 million, 3% above book value (as at
June 2025), and further details will be provided following completion of the
transfer. Through its JV stake, SUPR would retain a 50% interest in these
assets.

 

The Company would benefit from an annual management fee of 0.6% GAV on its JV
partner's 50% share of the five assets, in addition to the management fee it
currently receives from the £403 million seed portfolio.

 

The transaction is a continuation of SUPR's strategy of recycling capital into
highly accretive assets, whilst also creating additional management fee income
on existing stores transferred into the JV.

 

Following the transactions(1), SUPR's exposure to investment grade tenants (by
rent roll) will be 74%, and its exposure to Asda will be 8%. The Company's
pro-forma LTV will be 40%(2).

 

SUPR has a further c. £100 million of assets in exclusivity which the Company
hopes to close by the end of the calendar year.

 

Rob Abraham, CEO of Supermarket Income REIT, commented:

 

"These transactions further demonstrate our ability to deliver on our
strategy, as we continue to successfully drive returns for our shareholders.
Working closely with Blue Owl, we are pleased to have increased the scale of
the JV through the addition of these top quartile Asda stores and the expected
transfer of five of SUPR's existing stores.

 

"Looking ahead, we have further financing capacity to scale both our business
and the JV portfolio. All of our activity over the last nine months has been
focused on delivering earnings growth for our investors and I look forward to
updating the market on our progress, as we continue to focus on investing in
mission critical grocery real estate to deliver a fully covered and growing
dividend."

 

Asda assets purchased by the JV:

 

 Location
 Armadale Station
 Donnington Wood
 Llandudno
 Long Eaton
 Melksham
 Newmains
 St Austell
 Stockton
 Tunstall
 Yeovil

 

Notes

(1) Assumes the Company's five stores are transferred into the JV following
completion of due diligence

(2) LTV on a look through basis and assumes the Company's five stores are
transferred into the JV following completion of due diligence

 

 

 FOR FURTHER INFORMATION
 Supermarket Income
 REIT

 Rob Abraham / Mike Perkins / Chris McMahon                                                 ir@suprplc.com
                                                                                             

 Stifel Nicolaus Europe Limited                                                             +44 (0)20 7710 7600
 Mark Young / Rajpal Padam / Catriona Neville

 Goldman Sachs International                                                                +44 (0)20 7774 1000

 Tom Hartley / Luca Vincenzini

 Headland                                                                                   +44 (0)20 3805 4885
 Consultancy

 Susanna Voyle / Antonia Pollock / Dan                                                      SUPR@headlandconsultancy.com
 Mahoney

 

NOTES TO EDITORS:   

Supermarket Income REIT plc (LSE: SUPR, JSE: SRI), a FTSE 250 company, is the
only LSE listed company dedicated to investing in grocery properties which are
an essential part of national food infrastructure. The Company focuses on
grocery stores which are predominantly omnichannel, fulfilling online and
in-person sales and are let to leading supermarket operators in the UK and
Europe. The portfolio was valued at £1.6 billion as at 30 June 2025.

The Company's properties earn long-dated, secure, inflation-linked, growing
rental income. SUPR targets a progressive dividend and the potential for long
term capital growth.

The Company's shares are traded on the LSE's Main Market and on the Main Board
of the JSE Limited in South Africa.

Further information is available on the Company's
website www.supermarketincomereit.com (http://www.supermarketincomereit.com/)
 

LEI: 2138007FOINJKAM7L537 

 

 

Stifel Nicolaus Europe Limited, which is authorised and regulated in the
United Kingdom by the Financial Conduct Authority, is acting exclusively for
Supermarket Income REIT plc and no one else in connection with this
announcement and will not be responsible to anyone other than the Company for
providing the protections afforded to clients of Stifel Nicolaus Europe
Limited nor for providing advice in connection with the matters referred to in
this announcement.

Goldman Sachs International, which is authorised by the Prudential Regulation
Authority and regulated by the Financial Conduct Authority and the Prudential
Regulation Authority in the United Kingdom, is acting exclusively for
Supermarket Income REIT plc and no one else in connection with this
announcement and will not be responsible to anyone other than the Company for
providing the protections afforded to clients of Goldman Sachs International
nor for providing advice in connection with the matters referred to in this
announcement.

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