Supermarket Income Reit announced the completion of £40.9m of new earnings- and lease length-accretive acquisitions on Monday, marking further progress in redeploying proceeds from its April joint venture with Blue Owl Capital.
The FTSE 250 London-listed real estate investment trust said the transactions - completed at an average net initial yield of 6.4% - brought total redeployment from the Blue Owl partnership to £99.8m, at a blended yield of 6.7%.
It acquired a Tesco supermarket in Craigavon, Northern Ireland, for £25.6m, reflecting a 6.5% net initial yield.
The 8.6-acre site included a 130,000 square foot omnichannel store and a petrol filling station, operating as Tesco's main online fulfilment hub in the area with 12 delivery vans and click and collect services.
SUPR said the triple-net lease had 15 years remaining, with CPI-linked rent reviews every five years capped at 4% and floored at 0%.
The company also bought a portfolio of ten Sainsbury's convenience stores across the UK for £15.3m, at a 6.1% yield.
The stores, located in cities including Bristol, Edinburgh, Nottingham and Sheffield, weer let on 15-year triple-net leases with five-yearly CPI-linked rent reviews capped at 3% and floored at 1%.
It said the deal marked its first entry into the convenience grocery sector.
Following the acquisitions, SUPR said its pro forma loan-to-value ratio stood at 36%, with a portfolio weighted average unexpired lease term of 11 years.
"We continue to make good progress with redeploying the proceeds from our joint venture into income accretive opportunities," said chief executive Rob Abraham.
"We have a strong pipeline of large format omnichannel supermarkets, whilst we also see attractive relative value in smaller format convenience stores as demonstrated by our acquisition from Sainsbury's.
"Our relationship-led model and sector specialism continues to set us apart in the market, enabling us to unlock these unique opportunities and strategically scale the business."
At 0853 GMT, shares in Supermarket Income REIT were up 0.48% at 80.99p.
Reporting by Josh White for Sharecast.com.