Supermarket Income REIT (“The Company”) entered into a 50:50 joint venture ("The JV") with British Airways Pension Trustees Limited (“BAPTL”) on 27 May 2020 to acquire a 25.5% stake (the “Acquisition”) in one of the UK's largest portfolios of supermarket properties (the “Portfolio”) for £102 million. 

The Company’s contribution to the JV is £51 million, excluding costs.

The Portfolio consists of 26 Sainsbury's supermarkets. It is geographically diverse high quality portfolio of stores with a London and south east bias. It was created through two sale and leaseback transactions by Sainsbury’s in 2000. Following this transaction, the freeholds of the properties are now owned by Sainsbury’s (49%), Aviva (25.5%) and the JV (25.5%).   

The Portfolio is funded by bonds, which mature in 2023. The rental income received from the Portfolio pays down the outstanding balance of the bonds to a final amount which will be repayable in 2023 by way of a refinancing or sale of the Portfolio.  

Investment Summary:

  • High quality portfolio: the JV investment gives the Company an interest in a large freehold high quality portfolio of predominantly omnichannel supermarkets with strong property fundamentals.  

  • Progressive valuation growth: the Board is targeting annualised NAV growth from the investment in excess of the Company’s targeted annualised total shareholder return of 7-10%(1). 

  • Optimal capital structuring: the 50% JV investment interest is sized to minimise dividend cover dilution for the Company while maximising the total return to shareholders. 

  • Attractive future pipeline: the acquisition gives the JV a stake in a significant portfolio and the opportunity to increase that holding at the appropriate time. 

The Portfolio 

The Portfolio was created in 2000 through two sale and leaseback transactions which were funded by bonds issued under two securitisations Highbury Finance B.V. (“Highbury”) and Dragon Finance B.V. (“Dragon”).  Highbury and Dragon comprise 16 and 10 Sainsbury’s supermarkets respectively. The offering circulars for the original securitisation transactions are available via a paid for service on  

The Occupational Leases 

Sainsbury’s occupies the stores under the current occupational leases (the “Occupational Leases”) and pays 100% of the rents. The Occupational Leases generate an annual rental income of £53m, with the lease rent subject to fixed annual uplifts of 1% per annum. They expire conterminously with the maturity of the bonds in March 2023 (in relation to Highbury) and July 2023 (in relation to Dragon).


The income from the Occupational Leases services the interest and principal repayments of the bonds.  The bonds amortise out of the rental income to a remaining outstanding debt amount of £315 million on expiry in 2023. The debt due on expiry is expected to be funded by way of a re-financing or sale of the Portfolio. 


At lease expiry in 2023, Sainsbury’s has the option to extend the leases for a further term of 20 years at the higher of passing rent or open market rent, subject to upward-only, five yearly market rent reviews or to vacate the properties.  

JV Investment Adviser

Atrato Halliwell Limited (the “JV Investment Adviser”) will act as the investment adviser to the JV and is a newly established affiliate of Atrato Capital Limited. The JV Investment Adviser will receive an annual advisory fee payable by the JV only on the proportion attributable to BAPTL. There will be no additional advisory fee payable by the Company. The JV will also pay the JV Investment Adviser a promote fee based on the financial performance of the JV. The promote fee is a market standard, carry waterfall accruing from an 8% IRR but only payable by the JV if annualised returns to the Company exceed 10% at refinancing or sale.  


(1) There is no certainty that these illustrative projections will be achieved 



Map Legend

Joint Venture Portfolio 

Directly owned Portfolio

1. Alperton [MAP]
2. Alton [MAP]
3. Aylesford [MAP]
4. Bromley [MAP]
5. Chester [MAP]
6. Chichester [MAP]
7. Coventry [MAP]
8. Denton [MAP]
9. Derby [MAP]
10. Doncaster [MAP]
11. East Grinstead [MAP]
12. Eastbourne [MAP]
13. Ferndown [MAP]
14. Gloucester [MAP]
15. Guildford [MAP]
16. Hastings [MAP]
17. Haywards Heath [MAP]
18. Hemel Hempstead [MAP]
19. Kettering [MAP]
20. Kidlington [MAP]
21. Knotty Ash [MAP]
22. Leamington Spa [MAP]
23. Norwich [MAP]
24. Shrewsbury [MAP]
25. Taplow [MAP]
26. Witney [MAP
1. Ashford [INFO] [MAP]
2. Bristol [INFO] [MAP]
3. Cheltenham [INFO] [MAP]
4. Cumbernauld [INFO] [MAP]
5. Hessle [INFO] [MAP]
6. Mansfield [INFO] [MAP]
7. Preston [INFO] [MAP]
8. Scunthorpe [INFO] [MAP]
9. Sheffield [INFO] [MAP]
10. Thetford [INFO] [MAP]
11. Eastbourne [INFO] [MAP]
12. Sandbach [INFO] [MAP]
13. Edenbridge [INFO] [MAP]
14. Sudbury [INFO] [MAP]
15. Ely [INFO] [MAP]
16. Oundle [INFO] [MAP]
17. Newmarket [INFO] [MAP]
18. Telford [INFO] [MAP]
19. Bracknell [INFO] [MAP]
20. Newcastle [INFO] [MAP]
21. Beaumont Leys [INFO] [MAP]
22. Beaumont Leys [INFO] [MAP]
23. Market Harborough [INFO] [MAP]
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123 Victoria Street, London, SW1E 6DE

Telephone: +44 20 3790 8087,  Email:


Supermarket Income REIT plc is listed on the London Stock Exchange. SUPR acquires UK supermarket sites that form a key part of the future model of grocery in the United Kingdom. SUPR aims to provide long-term inflation-linked income, from institutional grade tenants and the potential for capital growth through active asset management. Atrato Capital is the Company's Investment Adviser.


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Supermarket Income REIT Plc is a proud member of the Association of Investment Companies implementing the principles and recommendations of the AIC’s Code of Corporate Governance.

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