// Sainsbury’s acquires the freeholds of 21 supermarkets for £431.5m
// It acquired Supermarket Income REIT’s remaining 51% stake of the stores in the Highbury and Dragon investment vehicles
Sainsbury’s has purchased the freeholds of 21 supermarkets in a £431.5m deal from Supermarket Income REIT.
The grocer acquired Supermarket Income REIT’s remaining 51% stake of the stores in the Highbury and Dragon investment vehicles – with the remaining 49% of which it already owned.
Sainsbury’s is buying 21 stores which it previously rented as supermarkets as part of the deal.
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There are five other stores which will be sold by Sainsbury’s, four of which Supermarket Income REIT could purchase for £33.2m.
The deal will be settled in three tranches – £279.3m will be paid on 17 March and £116.9m will be paid on 10 July.
The third tranche of £34.7m is conditional on the sale of the remaining five stores by Sainsbury’s.
Additionally, Sainsbury’s will fully fund the Highbury and Dragon bond redemptions of £170.5m on 20 March and £130.4m on 13 July, respectively.
The payments will be funded by utilising the group’s cash resources and also by drawing under a committed unsecured term facility.
Sainsbury said the assets acquired generated aggregate profits before tax of £110.4m in their most recent respective financial years.
The retailer said it has entered into new 15-year leases on four of these stores with five yearly open market rent reviews and a tenant break option at year ten.
