British supermarket property investment company Supermarket Income REIT (LON:SUPR) announced on Wednesday that it has agreed to acquire the Sainsbury’s (LON:SBRY) store in Hessle for a consideration of £34 million.
The site has been purchased from Reassure Limited and represents a net initial yield of 5.5% excluding acquisition costs.
The 13-acre site was developed in the 1980s and has been home to Sainsbury’s ever since, and underwent an “extensive” refurbishment in 2011.
The space consists of a 50,000-square-foot sales area, 584 parking spaces, and a 12-pump gasoline filling station.
The company has a “dedicated online fulfillment dock to support Sainsbury’s online grocery fulfillment in the surrounding area” and has a 14-year indefinite lease term with annual RPI-linked increment rent reviews. was acquired by.
Supermarket Income REIT added:
“The purchase price includes an adjacent Homebase store comprising 21,000 sq ft of net selling area, with a lease term of four years. Sainsbury’s will guarantee the Homebase rent for the term of the lease. This results in a total net initial yield of 6.3% on the purchase of Sainsbury’s in Hessle, including rental income from the home base.”
Comments from Supermarket Income REIT
In response to the update, Ben Green, director at Atrato Capital, the investment advisor to Supermarket Income REIT, said:
“This Sainsbury’s Superstore is ideally located for both online and offline grocery sales and joins Supermarket Income REIT’s growing portfolio of omnichannel stores.”
Memo for investors
After this update, the company’s stock price rose 0.40% (0.43 pence) to 107.43 pence per share as of 11:59 p.m. on February 19, 2020 (Japan time). The group’s P/E ratio is 20.19 times and the dividend yield is 5.26%.
