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magazineSupermarket Income hits the acquisition trail again
Supermarket Income REIT (SUPR) 107.25p
Gain to date: 2.1%
Original entry point: Buy at 105p, 2 April 2020
While we are not yet seeing material gains from our positive call on Supermarket Income REIT (SUPR) we see plenty of reasons to be encouraged.
On 17 September the company announced a strong set of results for the 12 months to 30 June – which showed it had collected 100% of rent, delivered a total shareholder return of 11.6% and increased the dividend by 3.8%.
The portfolio’s weighting towards ‘so-called’ omni-channel supermarkets – located in good geographies and with the ability to fulfil online orders and service shoppers in-store – has proved a solid strategy post-Covid.
Ben Green, from the REIT’s investment adviser Atrato Capital, notes there has been ‘five-to-10 years of expected growth’ in online groceries in a matter of months thanks to the pandemic.
He observes: ‘You can’t do online groceries from centralised automated hubs in the same way as non-food products. Food is perishable and you really need to be within 15 minutes of the customer and omni-channel is well positioned for that.’
The company continues to look to expand, announcing alongside the results a £150 million fundraise to invest in new assets – with property funds having to meet redemptions one source of deals. The target is to get to £1 billion to £1.5 billion in assets from £539.4 million as at the end of June.
SHARES SAYS: Keep buying.
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