Supermarket Income REIT PLC (AO) | Hold | Demonstrating a positive path to growth

Research evidence excerpt

Supermarket Income REIT PLC (AO) | Hold | Demonstrating a positive path to growth

impact on underlying EPS from FY2027/28.

justify its shares trading at an even smaller discount to their Super's broadening of its tenant base to include weaker credits

historical multiple versus our UK REIT coverage. increases the risk of lower rents from a tenant not paying rent

Catalysts due or revised lease terms allowing for lower rents.

A change in UK interest rates given Super's shorter-dated debt. Any signs of positive/negative long-term trends for the revenues

A change in UK CPI given most of Super's rents are linked to leading UK grocers generate from large format, omnichannel

inflation. stores.

Property revaluations could impact Super's capacity to acquire.

Key data charts

Price performance Revenue breakdown by division Asset breakdown by division

SWOT analysis

Strengths Weaknesses

Super's focus gives it scale advantages in its markets. Shorter dated debt increases potential earnings volatility.

Triple-net leases reduce Super's exposure to volatility in costs. Limited tenant diversification increases the sensitivity to an issue.

Focus on omnichannel stores creates upside from online sales growth. A young management team has less experience running a listed REIT.

Grocery tenants' operating profits are defensive in nature.

Opportunities Threats

Using knowledge and relationships to source attracive acquisitions. Different perspectives of the owners of some of Super's tenants.

Further increases in scale could further improve access to capital. The limited number of potential tenants for large format stores.

Greater use of JVs to fund expansion and generate additional fees. A big shift towards convenience-based grocery shopping.

Further international expansion.