Supermarket Income REIT Acquires 10 Asda Supermarkets
Supermarket Income REIT (SUPR), a UK-based property investment trust, has purchased ten Asda supermarkets for £196 million through a sale and leaseback deal. Each store is an omnichannel site with an average gross internal area of 78,000 square feet and is situated in highly desirable commercial zones.
Details of the Transaction
- The joint venture between SUPR and Blue Owl Capital now manages assets worth £833 million and consists of 23 properties.
- SUPR's direct contribution to the acquisition is £98 million, marking a 50% stake in the partnership.
- The properties come with 25-year leases, including annual CPI-linked rent reviews (capped at 4% and floored at 1%).
- Average passing rent is an affordable £19.90 per square foot for the Asda sites.
Management and Further Expansions
Asset management for the acquired supermarkets will be jointly handled by SUPR and its investment partners, while SUPR takes responsibility for financial management and reporting. Additionally, SUPR plans to transfer five of its existing assets—valued at £232 million—into the joint venture by the end of December, subject to due diligence.
Quotations from Company Leadership
“These transactions further demonstrate our ability to deliver on our strategy, as we continue to successfully drive returns for our shareholders. Working closely with Blue Owl, we are pleased to have increased the scale of the JV through the addition of these top quartile Asda stores and the expected transfer of five existing stores.”
“Looking ahead, we have further financing capacity to scale both our business and the JV portfolio. All of our activity over the last nine months has been focused on delivering earnings growth for our investors, and I look forward to updating the market on our progress, as we continue to focus on investing in mission-critical grocery real estate to deliver a fully covered and growing dividend.”
Author’s Summary
The acquisition of ten Asda supermarkets for £196 million boosts SUPR’s investment portfolio, reinforces its partnership with Blue Owl, and sets the stage for further strategic expansion in the UK grocery sector.