Supermarket Income REIT (LSE:SUPR) plans to raise approximately 100 million pounds through a share issue comprising an institutional placing, a South African placing for qualifying investors and a UK retail offer. The proceeds will help fund a 216 million pound pipeline of grocery property acquisitions, alongside existing debt facilities, as the company continues to expand its portfolio while targeting a loan-to-value ratio below 45 percent.
Acquisition pipeline expected to boost earnings
The proposed capital raise will support the acquisition of three UK supermarkets and six additional grocery properties secured by strong tenant covenants and inflation-linked leases.
Management said the acquisition pipeline is expected to increase earnings per share from the first full year of ownership while causing only minimal dilution to net tangible assets. The properties also offer opportunities to extend lease terms, improving long-term income visibility and enhancing total returns for shareholders.
Growth strategy backed by refinancing
The latest fundraising follows a series of recent acquisitions and lease renewals that have increased the weighted average unexpired lease term across the portfolio.
The company also completed a 445 million pound debt refinancing, reducing financing costs while extending the average maturity of its borrowings. Management believes these measures strengthen Supermarket Income REIT’s position as a scalable and low-cost owner of grocery real estate.
The company continues to pursue its long-term objective of doubling the size of its property portfolio through disciplined acquisitions and prudent financial management.
Attractive valuation supports investment case
Supermarket Income REIT continues to benefit from a relatively attractive valuation, supported by a low price-to-earnings ratio and a high dividend yield. The business also maintains solid operating margins and a strong balance sheet.
These strengths are partly offset by recent declines in revenue and free cash flow, together with a broadly neutral technical share price outlook. Updated dividend guidance and continued cost discipline provide additional support, although leverage and near-term earnings per share pressures remain factors for investors to monitor.
About Supermarket Income REIT plc
Supermarket Income REIT plc is a UK-listed real estate investment trust specialising in grocery-led property assets, including supermarkets, retail parks and distribution facilities.
Its portfolio is primarily leased to major investment-grade supermarket operators under long-term, inflation-linked triple-net lease agreements, providing stable and predictable rental income. Alongside its UK portfolio, the company also has a selective presence in France and aims to generate long-term shareholder returns through disciplined property investment and active asset management.
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