Grocery giant Sainsbury’s has bought the freeholds of 21 supermarkets for £431.5m from Supermarket Income REIT (SIR).

The grocer acquired SIR’s remaining 51% stake of the stores in the Highbury and Dragon investment vehicles, of which Sainsbury’s owned the remaining 49%. The purchase will be implemented through an acquisition by the supermarket chain of Cornerford Limited, Horndrift Limited, Avenell Property PLC and Hobart Property PLC.

By buying out SIR’s stake, Sainsbury’s is buying 21 stores, which it previously rented as supermarkets. There are five other stores that will be sold by Sainsbury’s, four of which SIR could purchase for £33.2m.

The acquisition is expected to complete on March 17 and will be paid in three tranches. The first £279.3m will be paid on that date, with £116.9m to be paid on July 10, 2023, and the third and final £34.7m tranche is conditional on the sale of the remaining five stores by Sainsbury’s.

As part of the deal, Sainsbury’s will fully fund the Highbury and Dragon bond redemption of £170.5m on March 20 and £130.4m on July 13, 2023, respectively.

The gross assets acquired total £431.5m and generated aggregate profits before tax amount to £110.4m in the last financial year.

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