Supermarket Income Reit is capitalising on the rapid shift in consumer shopping habits, reporting strong grocery income growth for the year to end-June.
The online grocery channel has seen sales grow by 88% between 2018 and 2025, now accounting for about 10% of the total market — a trend the UK-based Reit said continues to drive its performance.
“The non-discretionary grocery market continues to demonstrate growth and resilience while the UK grocery market has shown consistent growth, with sales up 5.4% year on year in July 2025 and forecast to grow to £259bn [about R6.1-trillion] in 2025,” the group said.
One of its major tenants, Tesco, increased sales and market share during the year, contributing to a combined 43% market share with Sainsbury’s.
Net rental income grew by 6% to £113m, while IFRS earnings per share swung to 4.9p from a loss of 1.7p the previous year. EPRA earnings dipped 2% to 6p, while the dividend rose to 6.12p.
The portfolio valuation rose 1.9% on a like-for-like basis, with net initial yield steady at 5.9%. It acquired £81.2m worth of assets at an average yield of 7.3%, locking in a 2.3% spread over its incremental cost of debt. Disposals totalled £466.8m.
The group has set its dividend target for the 2026 financial year at a minimum of 6.18p per share as it benefits from cost efficiencies after its internalisation. The group trimmed its EPRA cost ratio by 1.7% over the year, with further reductions expected in the coming period.
Loan to value (LTV) dropped to 31% by end-June from 37% a year earlier, giving the group capacity to pursue earnings-accretive acquisitions, with its loan to value now at 34%.
The group had about £450m in liquidity through cash and undrawn committed facilities. After the reporting period, it issued a £250m sterling bond with a six-year term and a fixed coupon of 5.125%. The issuance was oversubscribed.
Asset disposals totalled £466.8m, including the sale of Tesco Newmarket to Tesco Plc for £63.5m — 7.4% above book value. Eight stores in its 50:50 joint venture sold for £403.3m, which was 3% above book.
While demand for omnichannel stores remains strong, the group noted constrained transaction volumes as potential sellers hold on to assets, pushing valuations higher.
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