Supermarket Income REIT (SUPR) and Blue Owl Capital have completed a joint venture to acquire a portfolio of 10 Asda supermarkets in the United Kingdom for £196 million. The transaction is structured as a sale-and-leaseback, with 25-year leases on the properties and annual CPI-linked rent reviews capped at 4% and floored at 1%. The average rent across the stores is £19.90 per square foot, and the sites have an average gross internal area of 78,000 square feet each.

The acquisition sees SUPR contributing £98 million, matching Blue Owl’s 50 percent stake in the joint venture. The selected Asda stores are top-quartile, omni-channel retail sites, serving both in-person shoppers and online order fulfillment. In conjunction with this acquisition, SUPR is transferring five of its directly owned assets into the joint venture at a value of £232 million, pending due diligence. SUPR retains a 50 percent interest in both the newly acquired stores and the transferred assets, and it will receive management fees related to the joint venture.

The joint venture aligns with SUPR’s ongoing strategy to expand its grocery real estate exposure and generate earnings growth for shareholders. For Blue Owl, this represents its first major investment in the UK grocery sector, with plans to further scale its activity through the joint venture. SUPR has also indicated that approximately £100 million more in assets are under exclusivity, with additional acquisitions expected before the end of the year.

The deal increases the scale and diversification of the joint portfolio, demonstrating continued investor confidence in long-term, income-generating supermarket assets operated by a solid operator such as Asda. The resilience of the grocery sector and the strategic significance of omni-channel grocery sites are key factors underpinning the investment. The transaction represents a significant step for both SUPR and Blue Owl, enhancing their UK grocery asset portfolio and strengthening their market position.