Property investor raises dividend growth guidance after redeploying joint venture capital into new assets
Supermarket Income REIT PLC (LSE:SUPR, OTC:SUPIF) has reported a strong first half and identified a pipeline of more than £500 million of acquisition opportunities as it pursues an ambition to double the size of its portfolio.
The company, which owns supermarket properties let to major grocery chains on long-term inflation-linked leases, said it had fully redeployed capital raised through a joint venture with Blue Owl Capital, the US asset manager, into £398 million of new acquisitions.
With reinvestment complete, the group has raised its dividend guidance, targeting a minimum sustainable increase of 2% per year from its 2027 financial year onwards.
For the six months to 31 December 2025, the company declared a dividend of 3.09 pence per share, up from 3.06 pence in the same period a year earlier.
Annualised passing rent rose 11% to £132 million, while the portfolio valuation increased 27% to £2.06 billion following the new acquisitions, with like-for-like values up 1.3%.
EPRA earnings per share, a property industry measure that strips out valuation movements, fell 10% to 2.7 pence, which the company attributed to the temporary impact of assets being held in the joint venture before reinvestment and one-off costs from refinancing activity.
Dividend cover dropped to 88% from 99%, though the company said this would improve as new assets begin contributing income.
The loan-to-value ratio rose to 45% from 31% following the acquisitions, with the company noting the figure stood at 43%, including transactions completed after the period end.
The group's EPRA cost ratio, a measure of operating efficiency, improved to 9.2% from 13.6% a year earlier, which the company said reflected the benefits of bringing management in-house, and said it was on track to fall below 9%.
Rob Abraham, chief executive of Supermarket Income REIT, pointed to record UK grocery sales of £13.8 billion in December 2025 as evidence of the structural strength underpinning demand for the company's assets.
The company said its pipeline included grocery-anchored retail parks and European supermarkets, and that it was also exploring opportunities in grocery distribution, representing a broadening of its strategy beyond its core focus on UK omnichannel stores.