Supermarket Income REIT: Full Year Results
Supermarket Income REIT plc (LSE: SUPR), the UK supermarket real estate investment trust providing secure, inflation-protected, long income from grocery property in the UK, is today reporting its audited consolidated results for the Group for the year ended 30 June 2020 (the “Year”).
- 11.6% Total Shareholder Return for the year and 24.0% since listing in July 2017*
- 4.1% growth delivered in EPRA NAV to 101 pence per share as at 30 June 2020 (30 June 2019: 97 pence per share)
- Annual increase in dividend of 3.8%
- Portfolio of investment properties (the “Direct Portfolio”) independently valued at £539.4 million (30 June 2019: £368.2 million) increasing by £171.2 million:
- £22.4 million of valuation growth this year (excluding acquisition costs)
- £199.8 million of new acquisitions***
1*Includes dividends declared, for the year ended 30 June 2020
**LTV includes the proportional consolidation of the Sainsbury’s Reversion Portfolio
**Including Sainsbury’s Reversion Portfolio
BUSINESS HIGHLIGHTS
- £239.8 million of equity raised via two upsized and over-subscribed issuances of New Ordinary Shares:
- £100.0 million Placing and Offer for Subscription in October 2019
- £139.8 million Placing in April 2020
- Acquisition of three complementary omnichannel supermarket assets for an aggregate purchase price of £148.8 million at a blended net initial yield of 5.3%:
- Sainsbury’s in Preston, Lancashire for £54.4 million (excluding acquisition costs) with 22 years unexpired lease term and annual, upward-only, RPI-linked rent reviews
- Sainsbury’s in Cheltenham, Gloucestershire for £60.4 million (excluding acquisition costs) with 13 years unexpired lease term and five-yearly, upward-only, RPI-linked rent reviews
- Sainsbury’s in Hessle, Yorkshire for £34.0 million (excluding acquisition costs) with 14 years unexpired lease term and annual, upward-only, RPI-linked rent reviews
- Acquisition of the Sainsbury’s Reversion Portfolio:
- 50:50 joint venture (the “JV”) with British Airways Pension Trustees Limited
- The JV acquired a 25.5% stake in one of the UK’s largest Portfolios of UK supermarket properties for £102 million (excluding acquisition costs) (the Group’s investment was £51 million)
- Net loan to value (“LTV”) ratio of 22.3% as at 30 June 2020, with a weighted current cost of debt of 2.0%
- 100% of all rents collected in full
POST BALANCE SHEET EVENTS
- £188.9 million acquisition of nine supermarkets with a blended net initial yield of 4.8% comprising:
- Portfolio of six supermarkets via a sale and leaseback transaction with Waitrose & Partners (“Waitrose”) for £74.1 million (excluding acquisition costs) with 15 years unexpired lease term and five-yearly, upward-only, CPIH-linked rent reviews
- Morrisons in Telford, Shropshire for £14.3 million (excluding acquisition costs) with 13 years unexpired lease term and five-yearly, upward-only, RPI-linked rent reviews
- Tesco Extra in Newmarket, Suffolk for £61.0 million (excluding acquisition costs) with 15 years unexpired lease term and annual, upward-only, RPI-linked rent reviews
- Tesco Superstore in Bracknell, Berkshire for £39.5m (excluding acquisition costs) with 10 years unexpired lease term and annual, upward-only, RPI-linked rent reviews
- £134.8 million of new debt financing at a weighted average cost of 2.0% and weighted average term of 4 years
- Increased dividend target for the FY 2021 to 5.86 pence per share, increased in line with June 2020 RPI inflation
Nick Hewson, Chairman of Supermarket Income REIT plc, commented:
“This has been another year of solid performance by the Group in which we have generated a Total Shareholder Return of 11.6%. Since our IPO in July 2017, we have delivered a total return to shareholders of 24.0%. In an environment where income has become increasingly scarce, our highly specific investment strategy continues to provide our investors with stable, long-term, inflation-protected income, confirming our belief that supermarket real estate assets remain one of the most compelling asset classes in the UK investment market.”
