Supermarket Income REIT (FTSE:SUPR) has acquired six high-quality grocery assets for £104 million.
The FTSE 250 real estate investment trust invests exclusively in UK and European grocery property let to major supermarket operators.
Combined with a £118 million portfolio of three supermarkets it agreed to buy on 15 July, the deals fully deploy the proceeds of the £100 million equity raise the company completed that same month.
The blended acquisitions carry an average net initial yield of 6.6% and a weighted average unexpired lease term of 10 years.
The new assets span a Sainsbury's supermarket in Macclesfield, a Morrisons in Leeds, an M&S-anchored retail park in Nottinghamshire, a Co-op foodstore in Birmingham, an M&S-anchored scheme in Glasgow and a Sainsbury's distribution centre in Avonmouth.
Most leases carry RPI-linked or open market rent reviews on five-year cycles, with the Avonmouth distribution centre offering "potential to capture reversion" at its next review.
Chief executive Rob Abraham said the purchases mark "further progress in our strategy to diversify the portfolio, adding grocery distribution and additional exposure to grocery-anchored retail" alongside the company's core UK foodstore holdings.
He noted the pipeline was delivered within two months of the equity raise.
The company's portfolio was valued at £2.1 billion as at 31 December.
News Intelligence what this means for the company
Supermarket Income REIT has completed deployment of its £100 million July equity raise by acquiring nine grocery assets totalling £222 million across two tranches—a £118 million portfolio of three supermarkets agreed in July, and six additional properties for £104 million announced today. The blended portfolio carries a 6.6% net initial yield and 10-year weighted average lease term, with most rents linked to RPI on five-year review cycles, adding distribution and retail-anchored exposure to the company's core foodstore holdings.
The deployment completes the capital raise at yields materially above the company's weighted average cost of debt (4.4% as of July), supporting near-term income accretion. The portfolio remains modest relative to the £2.1 billion valuation base, and lease diversification into distribution and M&S-anchored retail reduces single-tenant concentration risk, though the investment case turns on sustained rental growth and tenant covenant strength in a competitive grocery market.
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