Wrap Text
Update On Portfolio Initiatives
SUPERMARKET INCOME REIT PLC
(Incorporated in the United Kingdom)
Company Number: 10799126
LSE Share Code: SUPR
JSE Share Code: SRI
ISIN Code: GB00BF345X11
LEI: 2138007FOINJKAM7L537
("SUPR" or the "Company")
UPDATE ON PORTFOLIO INITIATIVES
Supermarket Income REIT plc (LSE: SUPR), the real estate investment trust with secure, inflation-
linked, long-dated income from grocery property, is pleased to announce its progress against a number
of key portfolio initiatives which were outlined in the announcement on 18 November 2024. These
significant actions demonstrate the attractions of our high quality portfolio, our conservative valuations
and our ability to recycle capital to drive earnings accretion.
Sale of Tesco, Newmarket for £63.5 million
The Company has completed the sale of Tesco, Newmarket to its operator, Tesco plc, for £63.5 million.
The sale was completed at a 7.4% premium to the 30 June 2024 valuation. This sale of a large format
omnichannel store at an attractive valuation, underlines the strategic importance of the Company's
assets to the supermarket operators. The passing rent of the store upon disposal was £3.5 million.
In recycling the proceeds, the Board will consider options to create accretive value for shareholders.
The Company continues to actively explore opportunities to recycle capital through individual asset
sales and potential joint ventures at attractive valuations.
Lease renewals - average 4% rent to turnover1 and 35% above MSCI rents
The Company has successfully completed three lease renewals on Tesco stores located in Bracknell,
Bristol and Thetford, which were the three shortest leased Tesco stores in the Company's portfolio.
These store leases have been renewed at an average 4% rent to turnover1, 35% above MSCI's
supermarket benchmark index and 13% above the Company's valuer's estimated rental values (as at
30 June 2024). The leases have been extended to 15 years with annual RPI-linked rent reviews (subject
to a 4% cap and a 0% floor). The regeared stores are expected to benefit from a capital value growth
which will be fully reflected in the 30 June 2025 valuation.
The lease renewals demonstrate the affordable rental levels for the Company's strong trading, large
format omnichannel stores. The Company's WAULT has increased from 11 years to 12 years2. The
Company's next material lease expiry is not until 20323.
Earnings enhancing acquisitions - nine omnichannel Carrefour supermarkets in France
The Company has continued to demonstrate its ability to deploy capital into earnings enhancing assets
with an attractive spread to the cost of debt. The Company has completed the acquisition of a portfolio
of a further nine omnichannel Carrefour supermarkets in France. The stores were acquired through a
direct sale and leaseback transaction ("SLB") with Carrefour, for a total purchase price of €36.7 million
(excluding acquisition costs), at a portfolio net initial yield of 6.8%4. The Company now has 26 Carrefour
stores in France, representing c. 5%5 of its gross assets.
1 Based on Atrato Capital's estimates
2 Post: Sale of Tesco, Newmarket, three Tesco lease renewals and the acquisition of 8 Carrefour stores (plus one Carrefour
store for which the Company has signed a conditional purchase to buy)
3 Excludes leases where passing rent is <0.3% of annual rent roll
4 Includes one store for which the Company has signed a conditional purchase to buy
5 Exposure by valuations as at 30 June 2024, including post balance sheet events
The nine stores, which have an average gross internal area of c. 40,000 sq ft per store, operate under
the Carrefour Market brand and are all well established with long trading histories and low competition
in their catchment areas. These omnichannel supermarkets form part of Carrefour's "Drive" online
grocery fulfilment network.
The SLB portfolio has been acquired on a weighted average lease term of 12 years (with a tenant-only
break option in year 10), subject to annual uncapped inflation-linked rent reviews.
This acquisition was financed through a private placement with an institutional investor for €39 million
of new senior unsecured notes (the "Notes"). The Notes have a maturity of seven years and a fixed rate
coupon of 4.1%.
Following the placement of the Notes and receipt of proceeds from the sale of Tesco, Newmarket, the
Company has a pro-forma LTV of 38%.
Nick Hewson, Chair of Supermarket Income REIT plc, commented:
"We have made significant progress on the portfolio initiatives that we set out in November 2024, which
together are intended to support our earnings growth. These transactions highlight the inherent value
of the portfolio, the importance of these stores for the grocery operators and our ability to crystalise
value as part of our capital recycling strategy. We remain focused on continuing to make good progress
with our remaining strategic initiatives, including delivering further cost savings for the Company, and
we look forward to updating the market in due course."
FOR FURTHER INFORMATION
Atrato Capital Limited +44 (0)20 3790 8087
Rob Abraham / Mike Perkins / Chris McMahon ir@atratocapital.com
Stifel Nicolaus Europe Limited +44 (0)20 7710 7600
Mark Young / Rajpal Padam / Madison Kominski
Goldman Sachs International +44 (0)20 7774 1000
Tom Hartley / Luca Vincenzini
FTI Consulting +44 (0)20 3727 1000
Dido Laurimore / Eve Kirmatzis / Andrew Davis SupermarketIncomeREIT@fticonsulting.com
NOTES TO EDITORS:
Supermarket Income REIT plc (LSE: SUPR, JSE: SRI) is a real estate investment trust dedicated to
investing in grocery properties which are an essential part of the feed the nation infrastructure. The
Company focuses on grocery stores which are omnichannel, fulfilling online and in-person sales. The
Company's supermarkets are let to leading supermarket operators in the UK and Europe, diversified by
both tenant and geography.
The Company's assets earn long-dated, secure, inflation-linked, growing income. The Company targets
a progressive dividend and the potential for capital appreciation over the longer term.
The Company is listed on the Closed-ended investment funds category of the FCA's Official List and its
Ordinary Shares are traded on the LSE's Main Market. The Company also has a secondary listing on
the Main Board of the JSE Limited in South Africa.
Atrato Capital Limited is the Company's Investment Adviser.
Further information is available on the Company's website www.supermarketincomereit.com
LEI: 2138007FOINJKAM7L537
Stifel Nicolaus Europe Limited, which is authorised and regulated in the United Kingdom by the
Financial Conduct Authority, is acting exclusively for Supermarket Income REIT plc and no one else in
connection with this announcement and will not be responsible to anyone other than the Company for
providing the protections afforded to clients of Stifel Nicolaus Europe Limited nor for providing advice
in connection with the matters referred to in this announcement.
Goldman Sachs International, which is authorised by the Prudential Regulation Authority and regulated
by the Financial Conduct Authority and the Prudential Regulation Authority in the United Kingdom, is
acting exclusively for Supermarket Income REIT plc and no one else in connection with this
announcement and will not be responsible to anyone other than the Company for providing the
protections afforded to clients of Goldman Sachs International nor for providing advice in connection
with the matters referred to in this announcement.
The Company has a primary listing on the London Stock Exchange and a secondary listing on the
JSE Limited.
United Kingdom
24 February 2025
Sponsor: PSG Capital
Date: 24-02-2025 09:00:00
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