Supermarket Income REIT has acquired a Morrisons supermarket in Telford, Shropshire for c.€16m (£14.3m), reflecting a net initial yield of 5%. The deal represents a rare opportunity to purchase a modern Morrisons site providing long-dated, RPI linked income. The company also enhanced its relationship with Bayerische Landesbank with c.€39m (£35m) increase and term extension to its funding facilities.
The four-acre Morrisons site was developed in 2012 and is in the centre of Lawley Village, a new 3,550-home development. The unexpired lease of 17 years is subject to five-yearly, upward-only, RPI-linked rent reviews with a break option in year twelve. Telford is the second-fastest-growing town in the UK with the population forecast to grow to 198,000 by 2030, currently 178,000. The store is set at the centre of the growing residential community in Lawley Village.
In a statement, Ben Green, a director of Atrato Capital, the trust’s investment adviser, said: "This transaction represents an opportunity to acquire a modern Morrisons supermarket that is ideally located to benefit from the growing catchment at the centre of significant 3,550-home development. We are also pleased to extend our relationship with BLB, a key funding partner for us as we grow."
