LONDON (Alliance News) - Supermarket Income REIT PLC said Wednesday it has acquired a Tesco Extra supermarket in Nottinghamshire for GBP45.0 million from the Charities Property Fund in a cash-and-shares deal.
Supermarket Income will buy the 90,000 square foot store in Mansfield for GBP33.7 million in cash and 10.9 million shares at 103 pence each. The property has a unexpired lease term of 20 years with grocery giant Tesco PLC and annual, upward-only retail price inflation-linked rent reviews.
Shares in Supermarket Income were 1.0% lower at 102.00p on Wednesday.
The cash element will be funded by the GBP45.0 million equity placing completed in late March. The shares element was issued at an 8% premium to net asset value.
Following admission of the consideration shares to trading - expected on Thursday - Supermarket Income will have 239.8 million shares outstanding.
Ben Green, the director of Supermarket Income's investment adviser Atrato Capital, said: "This acquisition increases both the average unexpired lease term and the net initial yield of our portfolio."
The net initial yield for the acquisition stands at 5.3%.
"We are especially pleased to have been able to use Supermarket Income REIT shares as part consideration in a property acquisition for the first time," Green added. "We believe there are many investors who own individual supermarket properties that would benefit from swapping their ownership into shares in Supermarket Income REIT, gaining our diversification and specialist management."
Tesco (TSCO)
Supermarket Income (SUPR)