Supermarket Income REIT: Acquisition of Morrisons store and debt update

10th August 2020 | Supermarket Income REIT plc

ACQUISITION OF A MORRISONS SUPERMARKET IN TELFORD, SHROPSHIRE, AND AN UPDATE ON DEBT FINANCING

Supermarket Income REIT (LSE: SUPR), the real estate investment trust providing secure, inflation-protected, long income from grocery property in the UK, announces the acquisition of a Morrisons supermarket in Telford from Santander Trustees Limited for £14.3 million (excluding acquisition costs), reflecting a net initial yield of 5.0%.

Developed in 2012, the four-acre site is located at a prominent roadside junction in the centre of Lawley Village, a new 3,550-home development. The site comprises a 42,434 sq ft gross internal area supermarket (27,000 sq ft net sales area) with 220 parking spaces and an online click-and-collect facility.

It is being acquired with an unexpired lease term of 17 years with a break option in year 12. The lease is subject to five-yearly, upward-only, RPI-linked rent reviews (subject to a 3% cap and 1% floor).

The Company also announces it has increased its debt facilities with Bayerische Landesbank (BLB) by £34.8 million, comprising a new £27.5 million, secured, five-year tranche and a further £7.3 million tranche, upsizing its existing £52.1 million secured term loan for the remaining three-year term. The new facilities are in both cases priced at a 1.85% margin over 3-month Libor, representing a total cost of debt of 2.0%. Proceeds will be used to finance recently-acquired stores.

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

“This transaction represents an opportunity to acquire a modern Morrisons supermarket that is ideally located to benefit from the growing catchment at the centre of a significant 3,550-home development. We are also pleased to extend our relationship with BLB, a key funding partner for us as we grow”.

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