Supermarket Income REIT has agreed to acquire a Sainsbury’s supermarket in Melksham, Wiltshire, and a Waitrose supermarket in Winchester, Hampshire, from LaSalle Investment Management for £64.8 million, representing a combined net initial yield of 4.4%.
The Sainsbury’s store was developed in the 1990’s and subsequently extended and refurbished in 2011. The 9-acre site comprises a 47,000 sq ft net sales area supermarket, an 8-pump petrol filling station, 290 parking spaces and purpose-built online fulfilment distribution docks, which support Sainsbury’s online grocery deliveries across the region. It is being acquired with an unexpired lease term of 17 years, with annual, upwards only, RPI-linked rent reviews (subject to a 4.0% cap and a 1.0% floor).
The Waitrose site was developed in 2009 and comprises a 25,500 sq ft net sales area omnichannel supermarket with 180 parking spaces. In addition, 4 residential apartments, a GP medical centre and 4 ancillary units are also included in the purchase. The Waitrose store has been acquired with an unexpired lease term of 24 years, with 5-yearly, upward only, RPI-linked rent reviews (subject to a 3.3% cap and a 1.0% floor).
The acquisitions are expected to complete in the coming weeks upon the completion of property related due diligence.
“These two supermarkets are excellent additions to our portfolio. The lease lengths at 17 years and 24 years respectively are accretive to our portfolio WAULT of 16 years, whilst adding another Waitrose store brings further tenant diversification to the portfolio,” said Ben Green, Director of Atrato Capital, the Investment Adviser to Supermarket Income REIT.