Supermarket Income REIT plans management internalization

LONDON - Supermarket Income REIT plc (LSE: LON:SUPR), a real estate investment trust specializing in grocery property, announced its decision to internalize its management structure, pending shareholder approval. The move, with a £19.7 million price tag, aims to enhance strategic flexibility and shareholder returns. It is financed by the recent sale of a Tesco (OTC:TSCDY) store in Newmarket (NYSE:NEU) for £63.5 million.

The internalization is expected to yield at least £4 million in annual cost savings, equivalent to a yield on cost of approximately 19%. The company anticipates this change will improve EPRA earnings and support future dividend growth, with a new target EPRA cost ratio of below 9%. The transition is also designed to better align the interests of the company, its management, and shareholders.

Rob Abraham and Mike Perkins of Atrato Group, the current fund management team, will assume the roles of CEO and CFO, respectively, upon completion of the internalization. They bring a combined experience of over 29 years in real estate and financial services.

The internalization, scheduled for completion on or around March 25, 2025, is part of the company’s broader strategy to lower costs and drive sustainable earnings growth. It also includes a potential listing transfer to the "equity shares (commercial company)" category, which could attract a broader investor base.

In addition to management changes, the company plans to continue investing in omnichannel grocery properties in the UK and Europe. Supermarket Income REIT currently owns 82 supermarkets, leased to leading operators, and aims to remain a prominent landlord of omnichannel supermarkets in the region.

Atrato Group will receive £0.3 million for terminating its AIFM agreement and £0.8 million for providing transitional services post-completion. The board has determined to put the internalization to a voluntary shareholder vote, with a general meeting scheduled for March 20, 2025.

The Board, advised by Stifel Nicolaus Europe Limited, considers the internalization fair and reasonable for shareholders. This announcement is based on a press release statement.

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