Supermarket Income REIT PLC (LSE:SUPR) raised its dividend target after its directly-owned property portfolio soared in value over the past year.
The dividend for the year to June just ended increased 2% to 5.9p but the target for this year was increased to 5.94p per share to reflect the rising rent roll.
Supermarket Income specialises in properties let to the UK grocery majors and especially those that have online fulfilment potential.
An independent valuation puts the worth of its portfolio at £1.15bn at the end of June 2021, an increase of £609mln over the year and reflecting £541mln of additions and a £68mln increase in value.
Net assets rose 83% to £871mln with a NAV per share at 30 June 2021 of 108p.
“We have seen growing investor interest in the grocery sector with private equity attracted by the strong cash flows and the property backing. 2021 may see over £14 billion invested into the sector with Asda and, most likely, Morrisons being taken into private ownership," it said.
“We have also seen increased investment volumes into UK supermarket property with close to £2 billion invested in 2020 and already 2021 looks on track to exceed this.
"This sector growth and record investment interest has resulted in supermarket property yields falling, reflecting our long-term investment thesis.
“Our Direct Portfolio of investment properties was independently valued on 30 June 2021 at £1,148 million reflecting 8.5% like-for-like growth in value during the year, and this value growth in the Direct Portfolio has been the main driver of the increase in the Group's EPRA NTA to 108 pence as at 30 June 2021 from 101 pence as at 30 June 2020.”
“With the inflation-linked nature of our leases, combined with the financial and commercial strength of our tenants, we believe that the group is well-positioned to continue to provide investors with secure, long-dated inflation-linked income.
“Whilst the investment market for supermarket real estate is becoming increasingly competitive, the Investment Adviser continues to be able to identify and acquire attractive and exciting investments for the Group. “