Sainsbury’s to buy back 13 stores from joint venture portfolio

Sainsbury's to buy back 13 stores from joint venture portfolio

Supermarket Income REIT announced Sainsbury’s exercised a purchase option to acquire 13 stores from its Reversion Portfolio.

A joint venture between British Airways Pension Trustees Limited and Supermarket Income REIT 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 13 stores will be completed in March 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.

”In addition, Sainsbury’s has a remaining purchase option to acquire a further 10 stores in the portfolio, which can be exercised between December 2021 and January 2022,” said Supermarket Income REIT in a statement.

“Sainsbury’s decision to buy back these stores is further evidence of the strength of demand for grocery property in the UK and also demonstrates the balance sheet strength of the supermarket operators. The exercise of this first tranche of options is expected to generate a positive NAV impact for Supermarket Income REIT,” said Ben Green, Director of Atrato Capital Limited, the Investment Adviser to Supermarket Income REIT plc.