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Supermarket Income REIT plc has strengthened its joint venture with Blue Owl Capital through a GBP 196 million acquisition of ten omnichannel Asda supermarkets under a sale and leaseback agreement. SUPR will invest GBP 98 million, reflecting its 50 % share in the JV. The company has also agreed to transfer five of its existing assets, valued at GBP 232 million, into the JV before year-end, pending due diligence. The transaction includes new 25-year CPI-linked leases and will expand the JV portfolio, extend lease terms, and support SUPR's strategy of recycling capital into stronger-yielding assets.
Supermarket Income REIT plc has widened its collaboration with Blue Owl Capital Managed Funds as their joint venture agreed to acquire ten omnichannel Asda supermarkets for GBP 196 million. SUPR will contribute GBP 98 million in line with its 50 % interest in the JV. Advertisement
The ten stores were shortlisted from a larger group of 20 potential sites. Each supermarket is around 78,000 sq. ft. and positioned in areas with strong trading performance and consistent footfall. These assets will operate under new 25-year leases, with rent reviews linked to the Consumer Prices Index. The reviews follow a structure capped at 4 % and floored at 1 %, and the average passing rent stands at GBP 19.90 per sq. ft.
In addition to the acquisition, SUPR has reached terms to transfer five of its existing supermarket assets into the JV at a valuation of GBP 232 million. This transfer is expected to conclude later this year, subject to due diligence procedures. After completion, SUPR will retain an effective 50 % economic interest in these properties through the joint venture.
Once both the acquisition and transfer are completed, the JV portfolio is projected to reach a value of roughly GBP 833 million. These transactions will also increase the weighted average unexpired lease term by 0.7 years, bringing it to around 12 years. SUPR?s tenant exposure profile is expected to shift modestly, with investment-grade occupancy rising to 74 % and its exposure to Asda settling near 8 %.
SUPR noted that the decision to move its own stores into the JV supports its capital-recycling strategy, which focuses on selling lower-yielding assets and reinvesting in stronger-yielding opportunities. The structure also enhances fee income generated through JV management.
The company?s leadership stated that the JV expansion aligns with its long-term strategy and reflects confidence in both the partnership and the resilience of high-quality supermarket assets. They added that the newly acquired Asda properties represent strong operational sites and are expected to support future JV growth.
Source Reuters
5th Jun, 2025
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