Supermarket Income Real Estate Investment Trust (SUPR) has strengthened its UK grocery portfolio with the acquisition of three well-established supermarkets for £97.6m.

The newly acquired stores – operated by Tesco, Sainsbury’s and Waitrose – have long trading histories and have been secured at an average net initial yield of 5.5%.

All three are let on long, inflation-linked, triple-net leases, aligning with SUPR’s strategy of targeting resilient grocery locations with strong covenant strength.

The largest acquisition is a Tesco store in Aylesbury, Buckinghamshire, purchased for £56.3m. The 110,000 sq ft supermarket sits on an 11.2-acre site and includes a petrol filling station, Click & Collect facilities and dedicated home delivery capacity.

Tesco has traded from the site for more than 40 years, with 11 years remaining on the lease and annual RPI-linked rent reviews.

SUPR has also completed an off-market purchase of a Sainsbury’s store in Sale, Greater Manchester, for £33.8m. The 60,000 sq ft store has been trading for nearly three decades and benefits from 16 years of lease term remaining, again with annual RPI-linked rent reviews.

The third asset is a Waitrose supermarket in Frimley, Surrey, acquired for £7.6m at the highest yield of the three transactions. The 30,000 sq ft store has operated for over 25 years and includes both home delivery and Click & Collect facilities.

The acquisitions have been funded through SUPR’s existing debt facilities. On a pro-forma basis, the company expects its loan-to-value ratio to be around 43%, with a weighted average unexpired lease term of 12 years. Exposure to investment grade tenants has increased to 75%, further reinforcing the defensive nature of the portfolio.

Rob Abraham, CEO of Supermarket Income REIT, said the deals mark the culmination of a “transformational year” for the business, highlighting progress on lease renewals, capital recycling and the scaling of its joint venture with Blue Owl Capital.

“We are on track to have recycled approximately £400 million of capital this year into an exciting range of acquisitions across the various channels in our earnings accretive pipeline.

“We continue to see further opportunities ahead and look forward to continuing to grow the business as we cement our position as the leading landlord to grocery tenants.”

Click here to sign up to Retail Gazette‘s free daily email newsletter