Supermarket Income REIT Expands French Footprint with €123 Million Carrefour Portfolio Acquisition

Supermarket Income REIT (SUPR), listed on the London Stock Exchange (LSE: SUPR), has announced the acquisition of a significant portfolio of 20 Carrefour supermarkets in France for €123 million.

The move aligns with SUPR's objective to invest in accretive opportunities that bolster long-term dividend cover and growth.

The acquisition, executed through a direct sale and leaseback transaction, boasts an attractive net initial yield (NIY) of 6.6%. These 20 omnichannel stores are well-established within Carrefour's “Drive” online fulfillment network, indicating their importance to the retailer's operations.

These Carrefour-branded supermarkets are geographically diverse across France, complementing SUPR's existing portfolio. The stores benefit from limited competition in their respective areas, feature an average gross internal area of approximately 44,000 sq. ft., and are leased at an affordable average rent of €9.70 per sq. ft..

The portfolio's average capital value of €139 per sq. ft. is notably below the estimated replacement cost for these assets.

The leases come with a weighted average lease term of 12 years, including a tenant-only break option in year 10, and annual uncapped inflation-linked rent reviews. This structure offers SUPR a degree of inflation protection and long-term income visibility.

SUPR financed the acquisition using its existing unsecured revolving credit facility, with the all-in cost of the Euro-denominated borrowing capped at 3.5% until June 2030. The acquisition provides an attractive spread over the cost of debt, enhancing its financial appeal. Following the acquisition, the Company’s loan-to-value (LTV) ratio stands at 40%.

This transaction increases SUPR's Carrefour store count to 46, establishing a critical mass for efficient operations in France. The company anticipates that Carrefour will represent approximately 10% of its gross asset value upon full deployment of SUPR's debt capacity into near-term pipeline opportunities.

The company has now fully redeployed the approximately £200 million of net proceeds from its April 2025 strategic joint venture with Blue Owl Capital, at an average NIY of 6.6%. This redeployment has enhanced earnings through JV management fee income and the lower cost of Euro financing.

CEO Rob Abraham stated, “I am delighted that we have now taken our French exposure to scale through another direct sale and leaseback transaction with Carrefour as we continue to recycle capital into earnings enhancing opportunities that further diversify our portfolio. SUPR is targeting a number of attractive UK pipeline transactions in the coming months, supporting the delivery of a fully covered and growing dividend over the long term.”