Supermarket Income REIT (SUPR) Investor Update summary

Market fundamentals and strategy

• Focus on omnichannel supermarkets, benefiting from countercyclical grocery demand and structural tailwinds like high inflation, increased working from home, and online channel growth.

• 80% of rental income is inflation-linked, providing strong protection against economic volatility.

• Portfolio has an average lease length of 15 years, with high tenant concentration in Tesco and Sainsbury's, and low exposure to Morrisons and Asda.

• Sainsbury's joint venture monetization generated a 1.7x value increase and significant liquidity.

• Prudent debt management with fixed rates until 2026 and significant liquidity event expected in mid-2023.

Portfolio performance and resilience

• Portfolio comprises over 40 acquisitions, diversified by geography and tenant, with 93% omnichannel stores.

• Total rent roll is around £95 million, with a portfolio valuation yield of 4.7%.

• Average rent is £25 per square foot, with rent-to-turnover at 3.8-3.9%, indicating high affordability for tenants.

• Store turnovers are growing in line with inflation, while rent caps at 4% make rents increasingly affordable.

• Long-term leases and inflation-linked rent reviews drive compounded income and capital growth.

ESG and sustainability initiatives

• 81% of stores now have EPC ratings of A to C, with no E-rated stores, reflecting an 11% improvement.

• Tenants invest in energy efficiency, and the company is rolling out EV charging and rooftop solar across the estate.

• TCFD-aligned disclosures included in the annual report for the first time.

• Received EPRA gold governance award for the fourth consecutive year; new ESG committee chaired by a non-executive director.

• Rooftop solar could supply 40-50% of a store's electricity needs, with further plans for carport solar and EV charging as grid infrastructure improves.