Sainsbury’s buys back eight stores from joint venture portfolio

Sainsbury's buys back eight stores from joint venture portfolio

Sainsbury’s has exercised its second purchase option to acquire eight stores within its reversion portfolio.

Supermarket Income REIT announced an update in relation to its 50:50 joint venture with British Airways Pension Trustees Limited.

The JV has a 51% beneficial interest in the Sainsbury’s reversion portfolio. The remaining 49% beneficial interest is held by Sainsbury’s. The portfolio consists of the freeholds to 26 Sainsbury’s supermarkets.

Sainsbury’s acquisition of the eight stores will be completed in July 2023 upon expiry of the current occupational leases. The purchase price under the option is to be determined based on the assumption of a new 20-year lease to Sainsbury’s with the initial rent set at the higher of passing or open market, subject to upward-only, five yearly market rent reviews.

The exercise of this option is in addition to the first option exercised by Sainsbury’s on 10 September 2021 to acquire 13 stores within the portfolio, which will be completed in March 2023. In total, Sainsbury’s exercised its option to acquire 21 of the 26 stores in the portfolio.

“Sainsbury’s buyback of these stores is further evidence of the strength of demand for grocery property in the UK. The exercise of these purchase options is expected to generate a positive NTA impact for Supermarket Income REIT,” said Ben Green, Director of Atrato Capital Limited, the Investment Adviser to Supermarket Income REIT plc.