Supermarket Income REIT gets tailwind from buoyant grocery sector

Supermarket Income REIT PLC is a real estate investment trust dedicated to investing in grocery properties which are an essential part of the UK's feed the nation infrastructure.

The company focuses on grocery stores which are omnichannel, fulfilling online and in-person sales.

Supermarket Income REIT provides investors with attractive, long-dated, secure, inflation-linked, growing income with the potential for capital appreciation over the longer term.

Supermarket Income REIT PLC (LSE:SUPR, OTC:SUPIF) has completed a £90 million refinancing deal that will replace two near-term maturing loans and streamline the trust’s borrowing arrangements.

The London-listed investor in grocery-led property said the new three-year facility, provided by Barclays, is unsecured and carries an interest margin of 1.55% over the Sterling Overnight Index Average (SONIA). It also includes two one-year extension options, at the lender’s discretion.

The facility will be used to repay £30 million and £55.4 million of secured debt previously held with Wells Fargo and Bayerische Landesbank, respectively. Both loans were due to mature within the next 12 months and will now be cancelled in full.

CEO Robert Abraham said:  "This new facility continues our relationship with Barclays, a key funding partner to the company.

Supermarket Income REIT PLC (LSE:SUPR, OTC:SUPIF) has struck a major deal with US alternative assets group Blue Owl Capital, transferring eight of its UK grocery store assets into a new joint venture valued at £403 million.

The partnership, announced on Thursday, is part of SUPR’s broader strategy to recycle capital, reduce debt, and boost long-term earnings.

Supermarket Income REIT PLC (LSE:SUPR, OTC:SUPIF) received a reiterated 'buy' rating from analysts at Stifel, who raised their price target to 90p from 80p.

This followed a number of strategic changes over the past year, including the internalisation of its management function, which was completed this week.

In the face of the market persistently discounting their shares relative to net assets over the past couple of years, most self-respecting investment trust boards have tried various strategies to close the gap.

Supermarket Income REIT PLC (LSE:SUPR, OTC:SUPIF) has done what several others have discussed but rarely delivered - it has parted ways with its external investment manager and brought the team in-house.

The deal between Supermarket Income REIT PLC (LSE:SUPR, OTC:SUPIF) and Blue Owl Capital is a sensible move with clear merits, analysts said. 

SUPR formed a 50:50 joint venture with the US investment firm, transferring eight omnichannel supermarket assets valued at £403 million into the structure, generating around £200 million in net cash for the REIT with proceeds to be used to reduce leverage and support future acquisitions. 

"The strategic merits of the transaction are clear," said broker Panmure Gordon, "it allows SUPR to recycle capital at a premium, reduce near-term balance sheet risk, and participate in the future growth of a scalable platform."

Atrato Capital chief investment officer Steven Noble joins Proactive's Stephen Gunnion with news that Supermarket Income REIT PLC (LSE:SUPR, OTC:SUPIF) has acquired a portfolio of 17 omnichannel supermarkets in France from Carrefour through a sale and leaseback transaction valued at €75 million.

The deal ensures a leaseback to Carrefour for 12 years, yielding an initial return of 6.3% with the advantage of annual uncapped inflation-linked rent reviews.

Noble emphasized that this move aligns with Atrato Capital's ongoing strategy to focus on omnichannel stores, crucial for both online and in-store grocery sales. The acquisition not only fits its existing investment strategy but also expands its addressable market to the French grocery sector, valued at €284 billion. France was specifically chosen due to its significant online growth potential and Carrefour's strong market position and omnichannel capabilities.