Stifel has reiterated its 'buy' rating on Supermarket Income REIT PLC (LSE:SUPR, OTC:SUPIF) following the company’s half-year results.
The real estate investment trust, which focuses on grocery store properties, delivered performance in line with expectations, but the real story is what happened after the period ended.
The company has announced plans to internalise its management, a move Stifel believes will generate £4 million in annual cost savings and help sustain its dividend.
At 8.4%, the dividend yield is nearly double the UK REIT average, highlighting the stock’s strong income appeal.
Lease extensions have also strengthened the company’s position, with the portfolio’s average unexpired lease term increasing from 11 to 12 years and no major renewals for seven years.
Supermarket Income REIT has been actively recycling capital, with acquisitions in both the UK and France.
Meanwhile, the recent sale of a Tesco store in Newmarket at a 7.4% premium to book value underscores the attractiveness of its assets.
Both Peel Hunt and Panmure Liberum say 'hold' with price targets of 70p and 75p respectively.
In afternoon trading, the stock was up 1.4% at 74.04p.