REG - Supermarket Inc REIT - TWO ACQUISITIONS & DEBT FINANCING UPDATE

Supermarket Income REITAnnouncement

04/07/2022 07:00

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RNS Number : 1184R  Supermarket Income REIT PLC  04 July 2022

SUPERMARKET INCOME REIT PLC 

(the "Company") 

LEI: 2138007FOINJKAM7L537 

 

Acquisition OF TWO SUPERMARKETS AND DEBT FINANCING UPDATE

  

Supermarket Income REIT plc (LSE: SUPR), the real estate investment trust
providing secure, inflation-protected, long income from grocery property in
the UK, announces the acquisition of a Tesco superstore, M&S Foodhall and
an Iceland in Chineham, Basingstoke, and the acquisition of an Asda
supermarket in Carcroft, Doncaster, for a total purchase price of £82.9
million (excluding acquisition costs), reflecting a combined net initial yield
of 4.9%.

 

The 18.7 acre Chineham site has been acquired from Tellon Capital and
comprises a 60,938 sq ft net sales area Tesco superstore with a large
omnichannel operation, a 16-pump petrol filling station and 878 parking
spaces. The store is an online hub for Tesco, operating 13 home delivery vans
and a dedicated Click & Collect facility in the car park. The property
also includes an M&S Foodhall, Iceland and further complementary non-food
tenants. The Tesco store has a remaining lease term of 12 years and is subject
to 5-yearly open market rent reviews.

 

The Asda store in Carcroft comprises a 45,813 sq ft net sales area omnichannel
supermarket which sits on a 5.2 acre site and includes 340 parking spaces.
Asda has operated from the site since the 1970s with the store being fully
refurbished in 2019. The store supports Asda's online fulfilment in the area
through Click & Collect. The property was acquired via a direct sale and
leaseback transaction with Asda under a new 100 year lease. The property is
subject to 5-yearly rent reviews which are upwards only and CPI-linked
(subject to a 2.5% cap and a 0.0% floor).

 

Debt financing update

 

The Company has arranged a new £412.1 million unsecured credit facility with
a bank syndicate comprising Barclays, Royal Bank of Canada, Wells Fargo and
Royal Bank of Scotland International. This is the first time the Company has
accessed unsecured debt financing.

 

The new unsecured facility consists of three tranches:

 

·    £250.0 million five year revolving credit facility (with two further
one year extension options, up to a maximum term of seven years);

·    £100.0 million three year term loan (with two further one year
extension options, up to a maximum term of five years); and a

·    £62.1 million eighteen month term loan (with one further 18 month
extension option, up to a maximum term of three years)

 

The new unsecured facility has a margin of 1.5% over SONIA and a weighted
average term of 6 years.(1)

 

The new unsecured facility will be used in part to refinance £255.0 million
of existing secured commitments in addition to providing further debt capital
to continue to fund the growth of the Company.

 

The Company was advised on the new debt facility by Rothschild & Co.

______________________

(1) Inclusive of uncommitted extension options stated above.

 

 

Ben Green, Director of Atrato Capital Limited, the Investment Adviser to
Supermarket Income REIT plc, said:  

 

"These acquisitions further strengthen and complement SUPR's portfolio.
Chineham Park was a rare opportunity to acquire a Tesco, an M&S Foodhall
and an Iceland in a single transaction. The Asda acquisition represents the
longest duration asset in the portfolio with a very long 100 year lease.

 

The new unsecured facility is a significant milestone for SUPR, the scale and
quality of the portfolio now enabling the Company to finance on an unsecured
basis. We are delighted with the level of financing support received from our
existing and new relationship banks, affirming the robust nature of the
grocery sector."

 

 

 FOR FURTHER INFORMATION                                                                           
 Atrato Capital Limited                                                                           +44 (0)20 3790 8087 
                                  
 Steven Noble / Rob Abraham / Carcie Rogers                                                       ir@atratocapital.com (mailto:ir@atratocapital.com)   

 Stifel Nicolaus Europe Limited                                                                   +44 (0)20 7710 7600 
 Mark Young / Matt Blawat / Rajpal Padam                                                           
                                                                                                   
 FTI Consulting                                                                                   +44 (0)20 3727 1000 

  
 Dido Laurimore / Eve Kirmatzis / Andrew Davis                                                    SupermarketIncomeREIT@fticonsulting.com
                                                                                                  (mailto:SupermarketIncomeREIT@fticonsulting.com)   

NOTES TO EDITORS: 

Supermarket Income REIT plc (LSE: SUPR) is a real estate investment trust
dedicated to investing in grocery properties which are an essential part of
the UK's feed the nation infrastructure. The Company focuses on grocery stores
which are omnichannel, fulfilling online and in-person sales. All of the
Company's 69 supermarkets((2)) are let to leading UK supermarket operators,
diversified by both tenant and geography.

 

The Company provides investors with attractive, long-dated, secure,
inflation-linked, growing income with the potential for capital appreciation
over the longer term and targets a 7% to 10% p.a. total shareholder return
over the medium term((3)). The Company has increased its dividend every year
since IPO.

 

The Company is listed on the premium segment of the Official List of the UK
Financial Conduct Authority and its Ordinary Shares are traded on the Main
Market of the London Stock Exchange, having listed initially on the
Specialist Fund Segment of the Main Market on 21 July 2017.

Atrato Capital Limited is the Company's Investment Adviser. 

 

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

2. 43 directly owned supermarkets, plus 26 via joint venture.  Please note
that it was announced in January 2022 that Sainsbury's exercised its options
to acquire a total of 21 of the 26 stores in the portfolio

3. There is no certainty that these illustrative projections will be
achieved

 

 

 

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