Supermarket Income REIT has completed £40.9m worth of acquisitions across two transactions, strengthening its exposure to grocery assets and extending its average lease term, as the listed property investor continues to redeploy capital raised through its partnership with US investment firm Blue Owl Capital.

The London-listed trust said the deals, completed at an average net initial yield of 6.4%, bring total reinvestment from the Blue Owl joint venture to almost £100m at a blended yield of 6.7%.

The larger of the two transactions involves the purchase of a Tesco supermarket in Craigavon, Northern Ireland, for £25.6m. The 8.6-acre site includes a 130,000 sq ft store and petrol filling station, and serves as one of Tesco’s main omnichannel hubs in the region, handling both home deliveries and click-and-collect orders. The property is let on a 15-year triple-net lease with rent linked to the consumer price index, capped at 4% and floored at zero.

In a separate deal, Supermarket Income REIT acquired a portfolio of 10 Sainsbury’s convenience stores for £15.3m, marking its first move into the convenience grocery segment. The stores, located in cities including Bristol, Edinburgh and Nottingham, are let on 15-year leases with CPI-linked reviews capped at 3% and floored at 1%.

The company said the acquisition reflects growing opportunities in smaller-format grocery assets, where inflation-linked leases and long-term tenant commitments mirror those of larger supermarkets but can be secured at more attractive yields.

Following the transactions, the trust’s pro forma loan-to-value ratio stands at 36%, while the weighted average unexpired lease term across the portfolio is 11 years.

Below is a video, shot with the Atrato Group, the previous advisors behind SUPR, highlighting the Group’s investment strategy