Supermarket Income REIT says it will continue to grow its portfolio through acquisitions after reporting a 6% increase in EPRA net tangible assets (NTA) in the year to 30 June 2022 to 115p per share.
With dividends, this equates to a 12% NAV total return for the year and 7% share price total return – 48% share price total return since IPO in 2017 (a 9.7% annualised total return).
The group’s portfolio was valued at £1.57bn on 30 June 2022, increasing by £423.2m due to acquisitions and valuation uplifts on a like-for-like basis of 3.7%.
The portfolio’s weighted average unexpired lease term (WAULT) is 15 years, with 81% of leases inflation-linked. Annualised passing rent increased by 34% to £77.6m (3.7% on a like-for-like basis).
The group’s net loan to value (LTV) ratio was 19.0% as at 30 June 2022. The group has entered into interest rate swaps, hedging its £381m of drawn unsecured debt. The weighted average fixed rate is now 2.8% (including margin) over an average term of four years. 100% of drawn debt is now hedged at an effective fixed rate of 2.6% (including margin).
The cost of the new hedging instruments were £35.3m, which the company says will immediately impact EPRA NTA by 2.8p per share.
Continued investment
The company acquired 12 supermarkets for an aggregate purchase price of £381.0m during the year, at a blended net initial yield (NIY) of 4.5%, and post-period end has purchased five further assets for £216.1m at a blended NIY of 5.1%.
The company said it plans to continue to grow the portfolio through acquisitions. Ben Green, investment manager, said: “2023 is going to be another very busy year. We will continue to seek out new opportunities for growth to add to our already substantial pipeline and we’ll be looking to drive further value from the existing portfolio through active asset management.
“We are also optimistic that the current economic uncertainty may unlock some assets that we have coveted for a long time and/or offer the opportunity to acquire assets at attractive yields.”
Chairman’s comments
Nick Hewson, chairman of Supermarket Income REIT plc, said: “I am pleased to be reporting another set of strong full year results for the company. This has been another significant year of growth and one in which we achieved the important milestones of being added to the Premium Segment of the London Stock Exchange and the FTSE 250 index.
“During the year, our direct portfolio has benefitted from a 3.7% like-for-like increase in valuation delivering a 6% increase in EPRA NTA to 115 pence per share as at 30 June 2022. Since our IPO in 2017, we have delivered a 48% Total Shareholder Return.
“At a time of considerable unpredictability and uncertainty especially for our economy, we believe our portfolio of targeted, sector specific real estate assets will continue to deliver stable, long-term, and growing income to our shareholders.”
SUPR : Supermarket Income REIT to continue acquisition drive