Profit at Supermarket Income REIT has risen by a third as its chairman said the business is ready to face “another set of macroeconomic headwinds”.
Pretax profit was £110.3m in the year to 30 June, up by 35% on a year earlier. Passing rent rose by a similar proportion to £77.6m, while EPRA earnings jumped by 56% to £57.4m.
Net tangible assets soared by almost two-thirds to £1.4bn, with the portfolio valued at £1.57bn.
Over the course of the year the company invested £506.7m of equity raised across two upsized and over-subscribed issuances. Deals saw it buy 12 supermarkets for an aggregate purchase price of £381m at a blended net initial yield of 4.5%. Since the year-end it has acquired five more assets for £216.1m, as well as agreeing a purchase price for 21 stores in a joint venture portfolio that Sainsbury’s has exercised an option to acquire.
Chairman Nick Hewson said: “At a time of considerable unpredictability and uncertainty, especially for our economy, we believe our portfolio of targeted, sector-specific real estate assets will continue to deliver stable, long-term, and growing income to our shareholders.”
Justin King, senior adviser at investment adviser Atrato Capital and former chief executive of Sainsbury’s, said the grocery sector has been a “stand-out positive performer” in “a period of macroeconomic uncertainty”.
He added: “Supermarkets represent resilient investments, generally avoiding the volatile peaks and troughs of the economic cycle. Investors looking for property assets that offer consistent returns and low volatility have increasingly targeted the supermarket property sector.”
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