Structure of rental agreements allows trust to deliver income in line with rising prices

For all the challenges facing the groceries sector, Supermarket Income REIT (SUPR) is continuing to show the defensive qualities of investing in supermarkets.

The property portfolio comprises six sites, all of which have leases linked to retail price index (RPI) inflation. They are used by their operators to support online deliveries meaning structural changes should not render them obsolete.

The investment trust delivered a 3.2% increase in its second quarter dividend, backed by earnings growth and in line with RPI, and reiterated its commitment to a 5.63p dividend target for the full year ending 30 June 2019.

The shares trade at a 7.3% premium to net asset value (NAV) and offer a dividend yield of 5.6%.

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