Supermarket Income REIT acquires portfolio of Waitrose supermarkets

Supermarket Income REIT has acquired a portfolio of supermarkets via a sale and leaseback transaction with Waitrose & Partners (Waitrose) for GBP74.1 million (excluding acquisition costs), reflecting a net initial yield of 4.4 per cent.

The portfolio comprises six freehold supermarkets with an average gross internal area of 32,000 sq ft. The stores are let to Waitrose on new 20-year leases with a tenant-only break option in year 15 and are subject to five-yearly, upward-only, CPIH-linked rent reviews (subject to a 3 per cent cap and 1 per cent floor). The stores form a key part of Waitrose’s UK online grocery fulfilment network and offer home delivery and/or click and collect.

Waitrose will continue to trade from the stores as normal with no change from a customer or Waitrose Partner perspective.

Ben Green, Director of Atrato Capital, the Investment Adviser to Supermarket Income REIT, says: “We are very pleased with this transaction. All of the stores have an impressive trading record and are complementary to our existing portfolio, providing further tenant and geographic diversification”.

The stores in the portfolio are: Waitrose Eastbourne, High Street, BN21 1HR; Waitrose Edenbridge, Mont St Aignan Way, TN8 5LN; Waitrose Ely, Bray's Lane, CB7 4QJ; Waitrose Oundle, 66 East Road, PE8 4BZ; Waitrose Sandbach, Flat Lane, CW11 4BE; and Waitrose Sudbury, Station Road, CO10 2SS.