Supermarket Income REIT buys assets from British Land for £63.4m

Supermarket Income REIT buys assets from British Land for £63.4m

Supermarket Income REIT has acquired two assets, a Tesco Extra, and an Aldi supermarket, in Beaumont Leys, Leicester from British Land PLC.

The company said the total consideration is £63.4 million (excluding acquisition costs) reflecting a combined net initial yield of 6.4%.

The Tesco store was originally developed in the 1980’s and subsequently extended and refurbished in 2007 to a 97,000 sq ft net sales area Tesco Extra. The site has parking provision for over 700 vehicles and a 12-pump petrol filling station. In addition to the supermarket, the Tesco demise also comprises purpose-built online fulfilment facilities which support Tesco’s online grocery deliveries across the 262,000 population catchment area. It is being acquired with an unexpired lease term of 7 years, with 5-yearly, upwards only, open market rent reviews. The next rent review is in February 2023.

The Aldi supermarket is opening this year and extends to 14,800 sq ft of net sales area. It has been acquired with an unexpired lease term of 25 years (with break options at years 15 and 20) with 5-yearly, upwards only, RPI-linked rent reviews (subject to a 2.5% cap and 1.0% floor).

”Adjoining the Tesco Extra and the Aldi supermarket is a parade of units comprising 33,000 sq ft net sales area, predominantly occupied by Costa, Greggs, WH Smiths and Pets at Home.” said in a statement.

The site is adjacent to Fletcher Shopping Mall which will be retained as a separate interest by the vendor.

“We are pleased to have acquired a further omnichannel Tesco Extra, with this asset operating as a key online grocery fulfilment hub for Tesco. The Aldi acquisition provides further tenant diversification for the portfolio. Furthermore, we believe this site offers valuable asset management opportunities,” said Ben Green Director of Atrato Capital, the Investment Adviser to Supermarket Income REIT.