Supermarket Income REIT (LON: SUPR) reported a £2.2 billion portfolio value for FY2026, marking a 37% year-over-year increase and underscoring its expansion strategy. The company’s EPRA cost ratio improved to 9.2%, down from 13.6% pre-internalization, a 380-basis-point reduction driven by operational efficiencies and capital recycling efforts. Net rental income grew 6% year-over-year to £122 million, while EPRA earnings declined modestly by 4% to 5.7 pence per share. Total accounting return stood at 7.5%, with 90% derived from income and 10% from capital appreciation.
Key financial moves included £676 million deployed in acquisitions since July 2025, including nine grocery properties totaling £222 million funded by a £100 million equity raise—its first since 2022. The company secured £1 billion in debt financing, including a debut public bond issuance, extending weighted average debt maturity to 3.6 years and lowering the weighted average cost of debt to 4.4%. The LTV ratio rose to 45% (from 31% in June 2025), with net debt to EBITDA at 7.8x, comfortably within its target range of 7–8x.
The portfolio now comprises 140 properties, valued at £2.2 billion, with a 11-year weighted average unexpired lease term and 83% inflation-linked rent. Tenant exposure remains strong, with Tesco at 39%, Sainsbury’s at 25%, and Carrefour at 10%, alongside major UK supermarkets like ASDA, Waitrose, and Morrisons. The company aims to double its portfolio to £4 billion by FY27, shifting focus toward European grocery distribution and grocery-anchored retail parks while maintaining a 90% grocery income focus.
Strategic initiatives include capital recycling of £635 million, generating 0.3 pence per share in annualized net income accretion, and a £855 million joint venture with Blue Owl. The EPRA cost ratio target for FY27 is set below 9%, supported by £4 million in annual savings from internalized management. A 2% dividend increase is planned for FY27, with coverage nearing 100% after improving from 93% in FY26. The P/E ratio stands at 17.91, and the defensive beta is 0.59, reflecting a stable, defensive investment profile.
The company’s growth strategy aligns with the £44 billion UK supermarket sector, where Tesco and Sainsbury’s dominate with 28.1% and 15.6% market share, respectively. Recent acquisitions include a 128,000-square-foot Tesco omnichannel store in Edinburgh and a 67,000-square-foot Sainsbury’s logistics facility in Avonmouth, both on RPI-linked leases. Future expansion targets include European foodstores, grocery distribution facilities, and retail parks, with a focus on inflation-linked rents and investment-grade tenants.
Management described FY2026 as a period of
