A shopper leaves a Tesco supermarket in London. JSE and London listed Supermarket Income REIT plans to soon add three new grocery stores to its portfolio, including a Tesco store in Edinburgh and a Tesco store in Halifax.
Image: Facundo ArrizabalagaF
UK-based and JSE-listed Supermarket Income REIT (Supr) plans to raise £100 million (about R2,2 billion) via a rights issue, to help it acquire a pipeline of nine grocery assets for £216m.
The acquisitions align with the REIT’s ambitions to double the size of its portfolio.
"This fundraise will enable us to continue executing our growth strategy and is the latest step towards our ambition of doubling the size of our portfolio. The pipeline of assets will be earnings-enhancing and aligns with our portfolio strategy of acquiring well-located grocery assets with strong fundamentals,” said CEO Rob Abraham in a statement.
The rights issue will comprise an institutional placing conducted through an accelerated book build, launched on Wednesday, and will be available to new and existing eligible investors.
Additionally, the rights issue will include a placement of shares to selected qualifying investors in South Africa, along with a retail offer made via Retail Book, providing eligible existing and new retail investors in the UK with an opportunity to participate in the issue.
Abraham noted that these acquisitions will build on the significant progress made on their strategy over the last 18 months, “having created one of the most efficient and scalable platforms for growth with one of the lowest EPRA (European Public Real Estate Association) cost ratios in the sector.”
“We remain confident in the scale of opportunity in grocery real estate,” he added.
The company expects to imminently acquire a portfolio of three supermarkets for £118m, with an average net initial yield of 6,9%, which is due to complete in September 2026.
The portfolio comprises three stores with strong trading histories, let on triple-net leases that are 100% inflation-linked and represent 100% investment-grade income.
These include a Sainsbury's in Manchester with a rent of £34 per square foot and a 12-year unexpired lease term (ULT), a Tesco store in Edinburgh with a rent of £33 per square foot and a ULT of 5 years, and a Tesco store in Halifax with a rent of £35 per square foot and a ULT of 8 years.
The portfolio's relatively short weighted average unexpired lease term of 8 years and average rents of £34 per square foot represent regear opportunities to drive attractive total returns, according to the REIT’s directors.
There is a further pipeline of six UK grocery assets let to major grocers, with completion expected in the next three months for £98m. The assets include five UK supermarkets let primarily to investment-grade tenants, geographically spread across the UK, as well as one grocery distribution asset let to a grocery tenant with rents of £14 per square foot.
The issue and purchase of the advanced pipeline are expected to be accretive to earnings per share from the first full financial year with minimal NTA dilution, and are expected to deliver a reduction in the cost ratio. said Abraham.
“Whilst the company expects to announce results for the year ended June 30, 2026, in September 2026, the group's performance is in line with our expectations,” he said..
The company has delivered a total shareholder return of 29% since the management internalisation in March 2025. As of July 2026, the company, directly and indirectly through its joint venture, owns 131 supermarket assets across the UK and France, with an aggregate value of £2 billion.
In April 2025, the company formed a 50:50 joint venture with funds managed by Blue Owl Capital (JV). The JV was seeded with eight supermarket assets from the existing portfolio and subsequently acquired ten Asda supermarkets.
The JV marked the first key strategic initiative undertaken by the newly internalised management team to enhance shareholder returns and prudently recycle capital.
On July 2, 2026, the company announced the refinancing of £445m of existing debt facilities. The new facilities – a £375m syndicate and £70m bilateral – will refinance all of existing unsecured loan facilities maturing over the next two years.
“Despite a challenging and competitive environment, the group has demonstrated that it can continue to grow its portfolio on accretive terms while being highly selective with its approach to acquisition opportunities," said Abraham.
An increase in the company's equity base should improve liquidity, enhance the marketability of the ordinary shares, and result in a broader investor base over the longer term, directors said.
The total number of new ordinary shares to be issued and the price at which they are to be issued will be announced closer to the book build process.
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