Proactiveinvestors United Kingdom Supermarket Income Reit PLC https://www.proactiveinvestors.co.uk Proactiveinvestors United Kingdom Supermarket Income Reit PLC RSS feed en Fri, 19 Jul 2019 07:25:16 +0100 http://blogs.law.harvard.edu/tech/rss Genera CMS action@proactiveinvestors.com (Proactiveinvestors) action@proactiveinvestors.com (Proactiveinvestors) <![CDATA[RNS press release - Dividend Declaration ]]> https://www.proactiveinvestors.co.uk/companies/rns/17561/LSE20190708070005_14139186/ Mon, 08 Jul 2019 07:00:05 +0100 https://www.proactiveinvestors.co.uk/companies/rns/17561/LSE20190708070005_14139186/ <![CDATA[News - Supermarket Income REIT aims for bond-like yield on 'future proofed' model ]]> https://www.proactiveinvestors.co.uk/companies/news/222979/supermarket-income-reit-aims-for-bond-like-yield-on--future-proofed--model-222979.html Supermarket Income Reit PLC (LON:SUPR) is an investment trust that specialises in the supermarket freehold and long-leasehold property.

Set up two years ago and listed on London’s main market, Supermarket Income’s current portfolio comprises seven stores – five occupied by Tesco and one each by Sainsbury’s and Morrison’s. Asda properties are among the potential pipeline.

The company was set up by an ex-Goldman Sachs pair, Ben Green and Steve Windsor, who used to work with supermarkets to sell and lease back stores, carrying out several billion pounds worth of deals over the years.  

With the advent of IFRS accounting rules, meaning that assets that supermarkets had been able to class as off their balance sheet now were being classed on their balance sheet, Green and Windsor saw a consolidation role would be profitable.

They set up Atrato Capital, which is the trust’s adviser and since March has counted ex-Sainsbury’s chief executive Justin King as a senior investment advisor.

How does the trust work?

Purchases are made only of supermarket property with long unexpired lease terms, with a targeted average lease term of more than 15 years, leased only to the UK’s big four supermarkets on upward only rental contracts to provide investors with income security and considerable inflation protection.

Investments may in future be made in assets let to other supermarket operators such as Aldi, Lidl, Marks & Spencer or Waitrose.

Raising new money for investments is done each time an investment is identified, with £100mln raised on IPO in summer 2017, followed by £30mln later that year, £75mln last year and £45mln in March this year.

This month a 12-month extension was agreed for the maturity date on the £100mln revolving credit facility with HSBC to 30 August 2021, with unchanged terms.

Future-proof model

While the supermarket sector has hardly been having the easiest of times in recent year, with German discounters Aldi and Lidl storming the castle, the industry is not going anywhere.

Furthermore, one of the many boxes that supermarket properties need to tick in order to make it into the trust’s portfolio is that they need to be “future-proof”, that is they must be larger stores operating both as a physical supermarkets and as a fulfilment centre for the supermarket’s online grocery operations.

This is because Green and Windsor see the store-pick model of online grocery as the only truly viable option for the industry in the short, medium and long term.

“Online grocery is very different from general retail,” says Green. “Operationally its very complicated to do a the customer needs one-hour slots, the trucks need to maintain three different temperature zones.

“Most importantly is distance. Apart from in London, the model requires the companies to use existing physical stores in an omnichannel capacity, for their proximity to the customer, via click-and-collect or for store-picked deliveries.”

Indeed, this is why Amazon snaffled Wholefoods and why Chinese online giant Alibaba’s Hema stores are sweeping through China.

What’s the investment case? With seven properties the Supermarket Income REIT portfolio is valued at £366mln, with total passing rent of £19.2mln. The trust declared dividends of 2.8p per share in the last reported half-year to 31 December and said it was on track to deliver a full-year target of 5.63p per share, nudging that up to 5.68p per share for the next twelve months. The cost of debt is currently at 2.5% with a net loan to value ration of the portfolio was 43% as at 31 December 2018, versus a medium-term target of 45% dropping to below 40% in the long term. Based on the forecast dividend of 5.63p for the current year, and the properties on inflation-linked rents, a share price of 105.12p equates to a dividend yield of 5.4% with bond-like properties. Windsor says: "The biggest catalyst for a yield shift if the re-rating of Tesco's balance sheet."  Credit rating agency Moody's moved its rating on Tesco back to investment grade in June, following Fitch and with S&P expected to join in too.  ]]>
Thu, 27 Jun 2019 14:59:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/222979/supermarket-income-reit-aims-for-bond-like-yield-on--future-proofed--model-222979.html
<![CDATA[RNS press release - Extension of revolving credit facility ]]> https://www.proactiveinvestors.co.uk/companies/rns/17561/LSE20190625070005_14122609/ Tue, 25 Jun 2019 07:00:05 +0100 https://www.proactiveinvestors.co.uk/companies/rns/17561/LSE20190625070005_14122609/ <![CDATA[RNS press release - Holding(s) in Company ]]> https://www.proactiveinvestors.co.uk/companies/rns/17561/LSE20190620141558_14118687/ Thu, 20 Jun 2019 14:15:58 +0100 https://www.proactiveinvestors.co.uk/companies/rns/17561/LSE20190620141558_14118687/ <![CDATA[Media files - 'Rapid growth' of Supermarket Income REIT continues after £45mln raise and acquisition ]]> https://www.proactiveinvestors.co.uk/companies/stocktube/13814/-rapid-growth--of-supermarket-income-reit-continues-after-45mln-raise-and-acquisition-13814.html Thu, 20 Jun 2019 10:04:00 +0100 https://www.proactiveinvestors.co.uk/companies/stocktube/13814/-rapid-growth--of-supermarket-income-reit-continues-after-45mln-raise-and-acquisition-13814.html <![CDATA[RNS press release - Holding(s) in Company ]]> https://www.proactiveinvestors.co.uk/companies/rns/17561/LSE20190613124351_14110061/ Thu, 13 Jun 2019 12:43:51 +0100 https://www.proactiveinvestors.co.uk/companies/rns/17561/LSE20190613124351_14110061/ <![CDATA[RNS press release - Holding(s) in Company ]]> https://www.proactiveinvestors.co.uk/companies/rns/17561/LSE20190507134014_14065114/ Tue, 07 May 2019 13:40:14 +0100 https://www.proactiveinvestors.co.uk/companies/rns/17561/LSE20190507134014_14065114/ <![CDATA[RNS press release - Holding(s) in Company ]]> https://www.proactiveinvestors.co.uk/companies/rns/17561/LSE20190430141729_14057687/ Tue, 30 Apr 2019 14:17:29 +0100 https://www.proactiveinvestors.co.uk/companies/rns/17561/LSE20190430141729_14057687/ <![CDATA[RNS press release - Agreed rent review ]]> https://www.proactiveinvestors.co.uk/companies/rns/17561/LSE20190430070010_14056322/ Tue, 30 Apr 2019 07:00:10 +0100 https://www.proactiveinvestors.co.uk/companies/rns/17561/LSE20190430070010_14056322/ <![CDATA[RNS press release - Holding(s) in Company ]]> https://www.proactiveinvestors.co.uk/companies/rns/17561/LSE20190429162838_14056038/ Mon, 29 Apr 2019 16:28:38 +0100 https://www.proactiveinvestors.co.uk/companies/rns/17561/LSE20190429162838_14056038/ <![CDATA[RNS press release - Holding(s) in Company ]]> https://www.proactiveinvestors.co.uk/companies/rns/17561/LSE20190429161212_14056016/ Mon, 29 Apr 2019 16:12:12 +0100 https://www.proactiveinvestors.co.uk/companies/rns/17561/LSE20190429161212_14056016/ <![CDATA[RNS press release - Holding(s) in Company ]]> https://www.proactiveinvestors.co.uk/companies/rns/17561/LSE20190429070007_14054475/ Mon, 29 Apr 2019 07:00:07 +0100 https://www.proactiveinvestors.co.uk/companies/rns/17561/LSE20190429070007_14054475/ <![CDATA[RNS press release - Acquisition of Tesco store and issue of shares ]]> https://www.proactiveinvestors.co.uk/companies/rns/17561/LSE20190424070005_14049238/ Wed, 24 Apr 2019 07:00:05 +0100 https://www.proactiveinvestors.co.uk/companies/rns/17561/LSE20190424070005_14049238/ <![CDATA[RNS press release - Dividend Declaration ]]> https://www.proactiveinvestors.co.uk/companies/rns/17561/LSE20190408070007_14031650/ Mon, 08 Apr 2019 07:00:07 +0100 https://www.proactiveinvestors.co.uk/companies/rns/17561/LSE20190408070007_14031650/ <![CDATA[RNS press release - Holding(s) in Company ]]> https://www.proactiveinvestors.co.uk/companies/rns/17561/LSE20190328113255_14019614/ Thu, 28 Mar 2019 11:32:55 +0000 https://www.proactiveinvestors.co.uk/companies/rns/17561/LSE20190328113255_14019614/ <![CDATA[RNS press release - Holding(s) in Company ]]> https://www.proactiveinvestors.co.uk/companies/rns/17561/LSE20190328112747_14019605/ Thu, 28 Mar 2019 11:27:47 +0000 https://www.proactiveinvestors.co.uk/companies/rns/17561/LSE20190328112747_14019605/ <![CDATA[RNS press release - Holding(s) in Company ]]> https://www.proactiveinvestors.co.uk/companies/rns/17561/LSE20190328070001_14018583/ Thu, 28 Mar 2019 07:00:01 +0000 https://www.proactiveinvestors.co.uk/companies/rns/17561/LSE20190328070001_14018583/ <![CDATA[RNS press release - Holding(s) in Company ]]> https://www.proactiveinvestors.co.uk/companies/rns/17561/LSE20190326124324_14016337/ Tue, 26 Mar 2019 12:43:24 +0000 https://www.proactiveinvestors.co.uk/companies/rns/17561/LSE20190326124324_14016337/ <![CDATA[RNS press release - Holding(s) in Company ]]> https://www.proactiveinvestors.co.uk/companies/rns/17561/LSE20190325162550_14014869/ Mon, 25 Mar 2019 16:25:50 +0000 https://www.proactiveinvestors.co.uk/companies/rns/17561/LSE20190325162550_14014869/ <![CDATA[RNS press release - Result of issue ]]> https://www.proactiveinvestors.co.uk/companies/rns/17561/LSE20190322070004_14011707/ Fri, 22 Mar 2019 07:00:04 +0000 https://www.proactiveinvestors.co.uk/companies/rns/17561/LSE20190322070004_14011707/ <![CDATA[RNS press release - Increase in Issue size ]]> https://www.proactiveinvestors.co.uk/companies/rns/17561/LSE20190320123854_14009429/ Wed, 20 Mar 2019 12:38:54 +0000 https://www.proactiveinvestors.co.uk/companies/rns/17561/LSE20190320123854_14009429/ <![CDATA[RNS press release - Appointment of Justin King to Investment Advisor ]]> https://www.proactiveinvestors.co.uk/companies/rns/17561/LSE20190318070005_14004981/ Mon, 18 Mar 2019 07:00:05 +0000 https://www.proactiveinvestors.co.uk/companies/rns/17561/LSE20190318070005_14004981/ <![CDATA[RNS press release - PUBLICATION OF A SUMMARY DOCUMENT ]]> https://www.proactiveinvestors.co.uk/companies/rns/17561/LSE20190312122530_13999268/ Tue, 12 Mar 2019 12:25:30 +0000 https://www.proactiveinvestors.co.uk/companies/rns/17561/LSE20190312122530_13999268/ <![CDATA[RNS press release - Proposed Placing and Offer for Subscription ]]> https://www.proactiveinvestors.co.uk/companies/rns/17561/LSE20190312070013_13998125/ Tue, 12 Mar 2019 07:00:13 +0000 https://www.proactiveinvestors.co.uk/companies/rns/17561/LSE20190312070013_13998125/ <![CDATA[RNS press release - Holding(s) in Company ]]> https://www.proactiveinvestors.co.uk/companies/rns/17561/LSE20190311142054_13997693/ Mon, 11 Mar 2019 14:20:54 +0000 https://www.proactiveinvestors.co.uk/companies/rns/17561/LSE20190311142054_13997693/ <![CDATA[RNS press release - Agreed rent review ]]> https://www.proactiveinvestors.co.uk/companies/rns/17561/LSE20190307070004_13993087/ Thu, 07 Mar 2019 07:00:04 +0000 https://www.proactiveinvestors.co.uk/companies/rns/17561/LSE20190307070004_13993087/ <![CDATA[News - Supermarket Income REIT shapes up perfectly as a SIPP stock ]]> https://www.proactiveinvestors.co.uk/companies/news/215130/supermarket-income-reit-shapes-up-perfectly-as-a-sipp-stock-215130.html Just when sentiment about the big four supermarket chains seemed to be turning up, the CMA has thrown a spanner in the works.

The Competition Authority’s strong objections to Sainsbury’s and Asda’s merger might yet be overcome, but the likelihood is that it will either be blocked or a raft of stores come up for sale.

WATCH: 'Rapid growth' of Supermarket Income REIT continues after £45mln raise and acquisition

Supermarket Income Reit PLC (LON:SUPR) will be watching closely whatever the outcome.

Set up two years ago, the trust specialises in copper-bottomed supermarket assets and a stream of new stores becoming available would certainly be of interest.

Whether the REIT would buy any is a different matter entirely, however.

At present, the portfolio comprises just six stores – four occupied by Tesco and one each by Sainsbury’s and Morrison’s.

As that small number implies, the criteria applied to any potential acquisition is demanding.

Steve Windsor and Ben Green at Atrato Capital, the trust’s adviser, says stores must be large and crucially omnichannel.

That means as well as shoppers in person, there is scope for the store to be the source for online grocery deliveries in the immediate area.

Market yet to understand online grocery

Grocery is the key word here.

They believe the market has failed to grasp the mechanics of online grocery shopping.

It is different from other forms of online retail.

“People don’t understand the model  –  it is using physical stores in an omnichannel capacity.

Amazon is doing it with Wholefoods, while Chinese online giant Alibaba’s Hema stores are sweeping through China.

“They are sites (like ours) with capacity for home delivery. A store has to offer click and collect.”

Location is another key factor. Around 74% of all UK grocery deliveries in the UK are fulfilled from a store rather than a ‘shed’.

 “People won’t drive more than 15 mins to get groceries, but if you can make deliveries out of the same properties you can fulfil the true omnichannel capability.”

Another stand-out feature of Supermarket Income is the length of its leases and their inflation-proofing.

Inflation-linkage

The average is 19 years with upward only rent reviews linked to the RPI-index.

This year, for example, a rent review at Tesco’s store at Lime Trees in Bristol resulted in an RPI-linked rent increase of 3.2%.

Two other properties renewed in 2018 saw similar increases.

Annual rental income for the portfolio on a rolling basis is now is £16.5mln, while the six properties are valued at £320.7mln after a like-for-like uptick of around 1.3% over the past year.

Windsor and Green see scope for the portfolio to expand in size to £1bn over the medium-term.

Out of a pool of £20bn supermarket properties not owned by the retailer, about half meet its selection criteria with acquiring 10% of those seen as a reasonable objective.

All stores acquired so far are in or close to the top 25% of performers in the UK while one, Sainsbury’s store in Ashford, is one of the country’s best, believe Windsor and Green.

Top performing stores

The REIT has added a new store every six months over the past year and a half, with a Morrison’s in Sheffield the last acquisition in July at a cost of £51.7mln.

Net debt at the year-end was £138mln with a loan to value ratio of 43%.

That means financially the group is fully invested and if another store becomes available Supermarket Income will raise money to help pay for it.

Again, the speed it can act plays to its advantage.

 “Once we find a good store, we carry out due diligence and come to market to ask for money.

“That enables us to invest very quickly with the money deployed in six weeks on average.”

Earnings covered 93% of the 2018 dividend, which rose by 3.2% or the same as the last three rent reviews on the portfolio.

At a price of 103p, the yield currently is 5.3% and the premium to underlying (EPRA) NAV around 7%.

High-quality tenants and long leases

Given the quality of the tenant base, the long life and inflation-linked leases and stability offered by the grocery sector, that premium seems well-justified.

UK spending on grocery products has risen each year since 1999 according to retail analyst IGD and is forecast to grow by 15% over the next five years.

Wealth managers have already recognised the potential and account for a third of the shareholder base through both discretionary and advisory funds.

“Long -dated secured cashflows, secured by property with big household names and a large dividend linked to inflation make a very nice wealth management product.” 

It’s a combination that also seems ideal for self-invested pensions, though at present Supermarket Income remains more of an institutional secret.

As it gets larger, that should change.

That secure dividend and cash flow would seemingly nominate Supermarket Income as one of the first names on the list for anyone setting up their own portfolio.

In fact, the only thing Windsor and Green might consider changing is the name.

Supermarket Income REIT is fine, but “Last Mile Grocery Logistics” better reflects the way the market is changing.

 

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Fri, 22 Feb 2019 11:00:00 +0000 https://www.proactiveinvestors.co.uk/companies/news/215130/supermarket-income-reit-shapes-up-perfectly-as-a-sipp-stock-215130.html
<![CDATA[RNS press release - Director/PDMR Shareholding ]]> https://www.proactiveinvestors.co.uk/companies/rns/17561/LSE20190215103433_13971044/ Fri, 15 Feb 2019 10:34:33 +0000 https://www.proactiveinvestors.co.uk/companies/rns/17561/LSE20190215103433_13971044/ <![CDATA[Media files - Supermarket Income REIT snaps up commercial property in growing shopping sector ]]> https://www.proactiveinvestors.co.uk/companies/stocktube/12230/supermarket-income-reit-snaps-up-commercial-property-in-growing-shopping-sector-12230.html Thu, 14 Feb 2019 09:52:00 +0000 https://www.proactiveinvestors.co.uk/companies/stocktube/12230/supermarket-income-reit-snaps-up-commercial-property-in-growing-shopping-sector-12230.html <![CDATA[RNS press release - Agreed Rent Review ]]> https://www.proactiveinvestors.co.uk/companies/rns/17561/LSE20190213070002_13967187/ Wed, 13 Feb 2019 07:00:02 +0000 https://www.proactiveinvestors.co.uk/companies/rns/17561/LSE20190213070002_13967187/ <![CDATA[RNS press release - Half-year Report ]]> https://www.proactiveinvestors.co.uk/companies/rns/17561/LSE20190207070005_13961095/ Thu, 07 Feb 2019 07:00:05 +0000 https://www.proactiveinvestors.co.uk/companies/rns/17561/LSE20190207070005_13961095/ <![CDATA[RNS press release - Notice of Results ]]> https://www.proactiveinvestors.co.uk/companies/rns/17561/LSE20190115083001_13934897/ Tue, 15 Jan 2019 08:30:01 +0000 https://www.proactiveinvestors.co.uk/companies/rns/17561/LSE20190115083001_13934897/ <![CDATA[RNS press release - Dividend Declaration ]]> https://www.proactiveinvestors.co.uk/companies/rns/17561/LSE20190108070005_13926637/ Tue, 08 Jan 2019 07:00:05 +0000 https://www.proactiveinvestors.co.uk/companies/rns/17561/LSE20190108070005_13926637/ <![CDATA[RNS press release - Updated Key Information Document ]]> https://www.proactiveinvestors.co.uk/companies/rns/17561/LSE20190107080002_13925486/ Mon, 07 Jan 2019 08:00:02 +0000 https://www.proactiveinvestors.co.uk/companies/rns/17561/LSE20190107080002_13925486/ <![CDATA[RNS press release - Holding(s) in Company ]]> https://www.proactiveinvestors.co.uk/companies/rns/17561/LSE20190102070005_13920000/ Wed, 02 Jan 2019 07:00:05 +0000 https://www.proactiveinvestors.co.uk/companies/rns/17561/LSE20190102070005_13920000/ <![CDATA[RNS press release - Director/PDMR Shareholding ]]> https://www.proactiveinvestors.co.uk/companies/rns/17561/LSE20181231124504_13919688/ Mon, 31 Dec 2018 12:45:04 +0000 https://www.proactiveinvestors.co.uk/companies/rns/17561/LSE20181231124504_13919688/ <![CDATA[RNS press release - Director/PDMR Shareholding ]]> https://www.proactiveinvestors.co.uk/companies/rns/17561/LSE20181231122420_13919593/ Mon, 31 Dec 2018 12:24:20 +0000 https://www.proactiveinvestors.co.uk/companies/rns/17561/LSE20181231122420_13919593/ <![CDATA[RNS press release - Holding(s) in Company ]]> https://www.proactiveinvestors.co.uk/companies/rns/17561/LSE20181127150956_13882367/ Tue, 27 Nov 2018 15:09:56 +0000 https://www.proactiveinvestors.co.uk/companies/rns/17561/LSE20181127150956_13882367/ <![CDATA[RNS press release - Holding(s) in Company ]]> https://www.proactiveinvestors.co.uk/companies/rns/17561/LSE20181122145612_13877540/ Thu, 22 Nov 2018 14:56:12 +0000 https://www.proactiveinvestors.co.uk/companies/rns/17561/LSE20181122145612_13877540/ <![CDATA[RNS press release - Holding(s) in Company ]]> https://www.proactiveinvestors.co.uk/companies/rns/17561/LSE20181122130355_13877406/ Thu, 22 Nov 2018 13:03:55 +0000 https://www.proactiveinvestors.co.uk/companies/rns/17561/LSE20181122130355_13877406/ <![CDATA[RNS press release - Holding(s) in Company ]]> https://www.proactiveinvestors.co.uk/companies/rns/17561/LSE20181108111627_13860230/ Thu, 08 Nov 2018 11:16:27 +0000 https://www.proactiveinvestors.co.uk/companies/rns/17561/LSE20181108111627_13860230/ <![CDATA[RNS press release - Holding(s) in Company ]]> https://www.proactiveinvestors.co.uk/companies/rns/17561/LSE20181108094321_13859955/ Thu, 08 Nov 2018 09:43:21 +0000 https://www.proactiveinvestors.co.uk/companies/rns/17561/LSE20181108094321_13859955/ <![CDATA[RNS press release - Result of AGM ]]> https://www.proactiveinvestors.co.uk/companies/rns/17561/LSE20181106174013_13857400/ Tue, 06 Nov 2018 17:40:13 +0000 https://www.proactiveinvestors.co.uk/companies/rns/17561/LSE20181106174013_13857400/ <![CDATA[RNS press release - Agreed rent reviews ]]> https://www.proactiveinvestors.co.uk/companies/rns/17561/LSE20181105115609_13855191/ Mon, 05 Nov 2018 11:56:09 +0000 https://www.proactiveinvestors.co.uk/companies/rns/17561/LSE20181105115609_13855191/ <![CDATA[RNS press release - Holding(s) in Company ]]> https://www.proactiveinvestors.co.uk/companies/rns/17561/LSE20181102143708_13853637/ Fri, 02 Nov 2018 14:37:08 +0000 https://www.proactiveinvestors.co.uk/companies/rns/17561/LSE20181102143708_13853637/ <![CDATA[RNS press release - Holding(s) in Company ]]> https://www.proactiveinvestors.co.uk/companies/rns/17561/LSE20181022152430_13837874/ Mon, 22 Oct 2018 15:24:30 +0100 https://www.proactiveinvestors.co.uk/companies/rns/17561/LSE20181022152430_13837874/ <![CDATA[RNS press release - Dividend Declaration ]]> https://www.proactiveinvestors.co.uk/companies/rns/17561/LSE20181008080001_13819679/ Mon, 08 Oct 2018 08:00:01 +0100 https://www.proactiveinvestors.co.uk/companies/rns/17561/LSE20181008080001_13819679/ <![CDATA[RNS press release - 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