Supermarket Income REIT has acquired a Tesco Extra supermarket in the north Lincolnshire town of Scunthorpe, England, from Legal and General Pensions Limited for €60.4m (£53m), reflecting a net initial yield of 5.1%.
Developed in 2002, the store totals 98,000 ft² on an 8-acre site with more than 580 parking spaces, an 8-pump filling station and dedicated online fulfilment distribution docks. The store is strategically located to support online fulfilment given the excellent motorway and road connections. The store has a strong trading record on site and is situated adjacent to the Lincolnshire Lakes development, which consists of more than 6,000 new homes.
It is being acquired with an unexpired lease term of 22 years with annual, upward-only, RPI-linked rent reviews (subject to cap and floor) on fully repairing and insuring terms. The purchase has been funded from the proceeds of the €74.1m (£65m) equity placing on 25 May 2018.
Ben Green, Director of Atrato Capital, the Investment Adviser to Supermarket Income REIT, said: "We are delighted to continue our track record of rapidly deploying our capital in high-quality, omnichannel supermarkets. This store has an impressive trading record on site and plays an important role in Tesco’s online fulfilment network. This investment is a strong addition to our growing portfolio, increasing both the weighted average unexpired lease term and net initial yield of the Company’s portfolio”.
