The board of Supermarket Income Reit nearly doubled the size of its latest fundraise to £300m from an initial target of £175m after it received “extremely strong” support from investors.
Confidence on the part of the investment adviser in acquiring the assets in the pipeline and an increase in the availability of “attractive investment opportunities” were other drivers behind the increase, the board said.
At the time of the initial proposal on 7 April, chairman Nick Hewson said: “Omnichannel supermarket stores continue to play a pivotal role within the UK’s grocery infrastructure and present a safe haven for investors seeking a source of secure, predominately inflation-protected income in the current environment of rising inflationary pressures and wider geopolitical uncertainty.”
Since the company’s IPO in July 2017, it has deployed over £1.4bn of capital into a direct portfolio consisting of 41 supermarket assets and an indirect interest in a further 26 Sainsbury’s supermarkets through a joint venture with British Airways Pension Trustees.
Performance at the Reit has been a mixed bag. Over three years it has beaten the AIC’s IT Property–UK Commercial sector, returning 39.4% against the average trust’s 25.8%. But over one year it is solidly fourth quartile, figures from Trustnet show.
‘Opportunities in aggregate of over £700m’
Following the fundraise, an application will be made to the Financial Conduct Authority and the London Stock Exchange to admit an additional nearly 253.5 million shares to trading, which is expected to take place on 29 April.
Once admitted, Supermarket Income Reit will have nearly 1.24 billion ordinary shares in issue.
Hewson will then hold just over 0.53% of the company, while audit committee chair Jon Austen will hold nearly 0.23% and director Cathryn Vanderspar roughly 0.075%.
“We have seen extremely strong demand for this issue,” Hewson said. “We are grateful for the continued support of our existing shareholders and are pleased to welcome new investors, some of whom were able to participate for the first time following the migration of the company onto the premium segment of the official list earlier this year.
“The team’s focus is now on deploying the capital efficiently into our pipeline of opportunities. We have £150m of assets currently in exclusivity and a growing number of additional assets in our pipeline, representing opportunities in aggregate of over £700m.”