Supermarket Income sees portfolio valuation increase following acquisitions
Supermarket Income REIT saw its portfolio value reach £1.8bn during the second half of 2024, reflecting a like-for-like increase of 0.5%.
This included the £49.7m acquisition of a Sainsbury’s supermarket in Huddersfield, West Yorkshire, reflecting a net initial yield of 6.0%.
During the period, which covers the six months ending 31st December 2024, the real estate investment trust recorded an operating profit of £50.3m, a 12% increase compared to the first half of last year.
This was aided by an increase in annualised passing rent of 13% to £118.5m, bolstered by new acquisitions, and contractual rental uplifts during the period.
Post period end, Supermarket Income sold a supermarket in Newmarket, Suffolk, to its operator Tesco for £63.5m.
The group also said it is also engaged in active asset management with terms being negotiated for the development of three new discount stores.
Supermarket Income REIT is a real estate investment trust focused on omnichannel grocery stores. The company’s supermarkets are let to leading supermarket operators in the UK and Europe.
The group also recently proposed the internalisation of its management function for a consideration of £19.7m, which it said could deliver annual cost savings of at least £4m.
Nick Hewson, chair of Supermarket Income, said: “I am pleased with the progress we have made on the strategic initiatives announced in November 2024, which are ultimately designed to enhance the company’s earnings and close the discount to NAV. We have already delivered on a number of these objectives with the sale of Tesco, Newmarket above book value, the renewals of our three shortest lease assets at rental levels materially ahead of our valuer’s ERVs, and the acquisition of earnings enhancing assets in the UK and France.
“Delivering cost savings to enhance earnings is another important objective and the recently announced proposed internalisation of the company’s management function is part of this process, delivering material cost savings and strengthening alignment with shareholders.
“I look forward to another busy period focused on delivering on our strategic objectives, which we believe will help encourage the market to assign appropriate value to the quality of our portfolio.”