Supermarket Income REIT PLC (LSE:SUPR, OTC:SUPIF)’s latest valuation update signalled a 13.3% decline on a like-for-like basis over the six-month period for its portfolio of UK-based grocery store properties.
As of 31 December 2022, the REIT’s portfolio was independently valued at £1.63bn reflecting a net yield of 5.5%.
The decline in valuation reflected what Supermarket REIT called “the outward shift in property yields applied by valuers” resulting from higher interest rates and broader macroeconomic conditions.
Supermarket Income REIT’s valuation decline was partially offset by the group’s inflation-linked rental uplifts.
The average increase in rent from rent reviews performed during the six-month period to 31 December 2022 was 3.7%.
Ben Green, director of Atrato Capital, the investment adviser to Supermarket Income REIT, said: "Supermarket property has been less volatile than the broader UK property market but has not been immune to the outward yield shift experienced across investment markets.
“We have the advantage of operating in the non-discretionary spend grocery sector which continues to outperform the wider economy.
“Our high-quality, future-proof, omnichannel supermarket property portfolio will continue to deliver stable, long-term, inflation-linked income for our shareholders."
A complete breakdown of half-year results for the six-month period to end-December 2022 will be posted on 30 March this year.