Supermarket Income REIT plc has purchased a Sainsbury’s supermarket in Heaton, Newcastle upon Tyne, from the National Farmers Union for £53.1 million, reflecting a combined net initial yield of 4.1%.
The site comprises a 68,000 sq ft net sales area supermarket with purpose-built online fulfilment docks which support Sainsbury’s online grocery fulfilment across the store’s catchment area, over 420 parking spaces and a 12-pump petrol filling station.
The Newcastle Sainsbury’s supermarket is being acquired with an unexpired lease term of 21 years with five-yearly, upward-only, RPI-linked rent reviews (subject to an annual 4.0% cap and 1.5% floor). The next scheduled rent review is in November 2021 which will see the combined net initial yield from the site increase to a minimum of 4.6%.
The site also includes three unoccupied commercial units yielding over 9% which are principally leased to Peugeot Motor Company for a remaining term of six years.
“This omnichannel Sainsbury’s store is an excellent addition to our growing portfolio. The property has strong underlying fundamentals with an attractive inflation linked lease in excess of 20 years and provides asset management opportunities,” said Ben Green, Director of Atrato Capital, the Investment Advisor to Supermarket Income REIT.