Supermarket Income REIT H2 2026 Earnings Report

Supermarket Income REIT EPS Results

• Actual EPS: GBX 5.70
• Consensus EPS: N/A
• Beat/Miss: N/A
• One Year Ago EPS: N/A

Supermarket Income REIT Revenue Results

• Actual Revenue: N/A
• Expected Revenue: N/A
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

Supermarket Income REIT Announcement Details

• Quarter: H2 2026
• Date: 9/16/2026
• Time: Before Market Opens
• Conference Call Date: Thursday, September 17, 2026
• Conference Call Time: 9:30AM ET

Supermarket Income REIT (LON:SUPR) plc (LSE: SUPR, JSE: SRI), a FTSE 250 company, is the only LSE listed company dedicated to investing in grocery properties which are an essential part of national food infrastructure. The Company focuses on grocery stores which are predominantly omnichannel, fulfilling online and in-person sales and are let to leading supermarket operators in the UK and Europe. The Company's properties earn long-dated, secure, inflation-linked, growing income. SUPR targets a progressive dividend and the potential for long term capital growth.

Supermarket Income REIT H2 2026 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Portfolio growth and acquisitions: Gross assets increased 37% to £2.2 billion, while £676 million of earnings-enhancing acquisitions were completed, including nine properties bought at a 6.6% net initial yield.
• Positive Sentiment: Improved operating efficiency and financial flexibility: The EPRA cost ratio fell to 9.2% from 13.0%, with management targeting below 9% next year; debt maturities were extended, 98% of debt is fixed or hedged through June 2028, and average debt costs are about 4.4%.
• Positive Sentiment: The company increased its dividend target by 2%, supported by a fully occupied portfolio with 83% inflation-linked income and roughly 75% investment-grade tenants. Management expects dividend cover to reach 100% after the first full financial year following the equity raise.
• Negative Sentiment: Current earnings coverage remains below target: EPRA earnings per share fell 4% to 5.7p and dividend cover was 93%, reflecting cash drag from asset transfers and higher financing costs, although management expects earnings growth from the next financial year.
• Neutral Sentiment: Management aims to double the portfolio to approximately £4 billion, potentially expanding into grocery-anchored retail parks, European food stores and grocery logistics, but emphasized that growth will depend on finding accretive opportunities and did not provide a firm timeline.

Presentation

[Rob Abraham, CEO at Supermarket Income REIT]

Thank you, and good afternoon, everyone. Thank you for taking the time to join us. I have also got Mike Perkins, our CFO, with me. Really what we have been talking to in this set of results is establishing SUPR as a platform for growth over the last year, and beginning to deliver on that strategy to grow the business. That is with a view to ultimately growing earnings and supporting our future dividend growth. That has taken us now to GBP 2.2 billion of gross value of the assets. We have scaled our joint venture in that time, so that GBP 2.2 billion includes the 50% share of the joint venture we have. That number is up from GBP 1.6 billion around a year ago.

[Rob Abraham, CEO at Supermarket Income REIT]

As we have grown the portfolio, that has also been through earnings-enhancing transactions, and that gives us now the capacity to increase the dividend for the coming year by 2%. That means that our dividend yield today, at the current share price, is around 7.5%. That is, of course, backed by very high-quality income from the leading supermarket operators, so a very healthy dividend. Also the benefit now that shareholders are seeing of that scale is our very efficient platform. The cost ratio at 9.2%, and with some of the latest growth we have been delivering, we think that 9.2%, well, we know it will continue to trend lower. This is all about delivering value for shareholders, and as we grow, shareholders will see the benefit of that. Just a quick overview of how the portfolio looks today.

[Rob Abraham, CEO at Supermarket Income REIT]

140 supermarkets, 90% or so is in the U.K. still. By number, about 46 of the assets are in France, but they are smaller lot sizes, smaller value. 11 year average lease length, 83% of our income is inflation linked, so we get contractual rental uplifts along with inflation. The portfolio is 100% occupied, and around 75% of our income is investment grade, so very high quality, defensive income coming through on those attractive lease terms. It has been a highly active year of strategic progress for us. I have mentioned that we scaled the joint venture with Blue Owl, that is now at GBP 855 million. That was through a series of transactions in different phases. The scaling of the JV has released some capital and that has enabled us to make GBP 676 million of earnings accretive acquisitions since July last year.

[Rob Abraham, CEO at Supermarket Income REIT]

Mike and the team have been busy undertaking GBP 1 billion of debt financings over the year, and that includes our debut public bond that was very well backed. After the year end, we undertook some more proactive lease renewals, and that is proving sustainable rents, and we expect to be accretive to total return. Finally, we were delighted to raise GBP 100 million back in July. The proceeds of that have now been fully deployed. Now this slide shows, it was a slide we had back in our interim results in March, our ambitions to double the size of the portfolio. At the top of the page is an illustration of how that portfolio might evolve as we grow.

[Rob Abraham, CEO at Supermarket Income REIT]

From GBP 2 billion-GBP 4 billion, there's a way to a 10% allocation to grocery anchored retail parks, which we already own a number of those. Also 15% to European food stores. We're at 10% today. We see the range being broadly 10%-20% in Europe. Also grocery distribution, which was, we bought our first logistics asset in our most recent phase of deployment, and we see that being an avenue for potential growth in the future. But whilst we deliver that growth, we can maintain the attractive investment fundamentals of the current portfolio. So we expect to be around 90% grocery income, we expect to be around a 12 year average lease length, 80% or so being inflation linked, and 70% or so being investment grade. So again, very high quality, contractual, long dated income.

[Rob Abraham, CEO at Supermarket Income REIT]

I mentioned we raised GBP 100 million in July. That was our first equity raise since 2022. We've now fully deployed the proceeds of that in the space of just two months. Using those proceeds and the associated debt financing, we've acquired nine high quality grocery properties for a total value of GBP 222 million. 82% of that income is investment grade, 87% is inflation-linked, and at a 6.6% net initial yield, that transaction is accretive to earnings and therefore also supports future dividend growth. Lastly on this page, that scale also further reduces the already very efficient cost ratio that we have. To take you through a couple of examples of what we've bought in that phase of deployment. So a Tesco store in Edinburgh on the left-hand side there. Large format, top performing omnichannel store, very much core product for us.

[Rob Abraham, CEO at Supermarket Income REIT]

Five years remaining on the lease and at GBP 33 a sq ft, there's a good opportunity for us to renew that lease in years to come, and unlock some value for shareholders that way. In the middle, that first mission-critical logistics warehouse that we've acquired, brand new build, Sainsbury's down in Avonmouth near Bristol. With that brand new build, the tenant has also made a significant amount of capital investment in the fit-out of that property. Lastly, on the right, an M&S-anchored retail park in Nottinghamshire. This is an interesting opportunity because we've got an upcoming open-market rent review, and in that, we see some strong evidence to support pushing up the rent at that next review. Particularly based on some of the evidence shown from the Homebase stores that went vacant and have been converted to food stores. I'll talk some more to that later.

[Rob Abraham, CEO at Supermarket Income REIT]

We've been clear then on the ambition to grow the portfolio, and we've got a variety of capital sources to deliver that. I've just talked to equity raising, and how we've just successfully done that, but also through joint ventures. Their benefit there is additional management fee income. We've also got really strong liquidity in the debt markets, and then also capital recycling. That can be outright store sales as well as potentially establishing some new joint venture vehicles. With that, I will let Mike talk through the numbers.

[Mike Perkins, CFO at Supermarket Income REIT]

Brilliant. Thank you, Rob. Good afternoon, everyone. It has been an extremely busy year, full of activity, and the point for us is that activity has been designed to strengthen the business and position us for future growth. If I take you through some of the highlights, then we will go through them in more detail later on the slides. At a headline level, GBP 122 million net rent income, up 6%. We have seen the EPRA cost ratio down to 9.2%, which is down 380 basis points since the prior year. EPRA earnings was 5.7 pence, down 4%. Portfolio value of GBP 2.2 billion. As we said, that is up 37% since June 25. 87.5 pence NAV per share, which is marginally higher than June 25 at 87.1 pence. Total accounting return strong at 7.5%, and that is income driven. Turning through the slides in slightly more detail.

[Mike Perkins, CFO at Supermarket Income REIT]

This chart on the left there just shows how active we have been. The first bar is the passing rent immediately prior to our completion of the joint venture back in May last year, passing rent of GBP 117 million. You can see the income that we have lost, I guess, through the sale of assets into the JV, reduced passing rent by GBP 21 million, but in those two boxes next to it, we have deployed GBP 454 million of capital in this financial year, which has added about GBP 31.8 million of new rents, and that acquisition deployment was at a 6.5% net initial yield. Then we have continued to see like-for-like growth in the portfolio, adding a further GBP 2.1 million to passing rents. Then looking forwards, the impact of the equity raise post year-end, you can see another GBP 14.8 million of passing rent.

[Mike Perkins, CFO at Supermarket Income REIT]

Our pro forma today is GBP 144.3 million, but those boxes on the right are still hugely important. We have got a really highly secure and efficient income profile. Another period, again, of 100% occupancy and rent collection, 75% of our income is underpinned by investment-grade covenants, and we have a sector-leading 99.5% gross net income ratio. Really efficient structure. What we have shown here is the value that we have been able to create through the capital recycling. We have transferred GBP 635 million of assets into the JV, and that chart on the left there, you can see we disposed of those at an average disposal yield of 6.2%. With the net proceeds we have received, we have recycled that into high-yielding assets.

[Mike Perkins, CFO at Supermarket Income REIT]

We have deployed at 6.8%, but the kicker you get with the management fee on top of that creates a spread to our initial of about 120 basis points. What we have shown on the right there is how this translates into earnings, and this is the annualized impact on net income. You can see the assets that we have been acquiring out will more than offset the income we have lost, and then that additional management fee should give you about 0.3 pence of additional earnings on an annualized basis, which is broadly about 5% on dividend cover. That should drive future earnings growth, and for selling it into the JV, we have still retained that 50% exposure. We have been recycling proceeds into high-yielding assets and that recurring management fee, all driving future earnings growth.

[Mike Perkins, CFO at Supermarket Income REIT]

Part of the rationale for internalization was to create a really efficient structure that was more aligned. We have shown on the left here the progress we have made since internalization. That 13.6% was the last reported cost ratio prior to internalization. You have seen that come down to 9.2% today, and that is broadly around GBP 4 million of annualized cost savings. We are very much on target to deliver our sub 9% cost ratio from the next financial year. We have been investing in the teams. We have made some hires into senior hires this year, but certainly future growth should be very efficient for us and not having to have that low incremental cost. You would expect to see that 90% come down as we scale.

[Mike Perkins, CFO at Supermarket Income REIT]

Just going through our earnings for the year, so 4% reduction in EPS as we were redeploying the capital that we received following the JV end and as we strengthen the balance sheet. On the left there, you can see the cash drag on the assets that we transferred into the JV, reduced EPS by 0.3 pence. The increase in weighted average cost of debt is largely due to our debut public bonds, which reduced earnings by 0.4 pence. Whilst that had an initial impact on EPS, it has materially strengthened the balance sheet. We now have longer maturity profiles. We have more diversified funding sources, and increased the proportion of our debt that is fixed rate. That was done at 5.125%, which was relatively attractive pricing.

[Mike Perkins, CFO at Supermarket Income REIT]

What we have shown in those three bars on the right, the benefit, the management fee, the like-for-like net rents coming through, you can see have added 0.1 pence respectively. That cost savings driving earnings growth as well, which added another 0.2 pence. Whilst EPS was marginally lower for the year, we have positioned the business to operate in that higher interest rate environment, and expect to certainly see earnings growth coming through from next financial year. Turning to the balance sheet, we continue to deliver the income-led total return. The bar chart on the left there just shows the bridge in our EPRA NTA per share over the year. As of June 25, our EPRA NTA was 87.1 pence. We have covered EPRA earnings, which were 5.7 pence. We paid dividend of 6.2 pence in the year.

[Mike Perkins, CFO at Supermarket Income REIT]

Revaluation and realized, unrealized gains, our valuations were up on a like-for-like basis about 2.5%, and that translates then into about 2.8 pence of NAV growth, which has been partially offset by our acquisition related costs as we have been acquisitive in this year. So NTA marginally are up by 0.4% to 87.5 pence a share, but a 7.5% total count to return. What we want to draw out on the right-hand side here is this is really what differentiates Supermarket Income REIT is the quality of that return. You can see Supermarket Income REIT's total return is broadly 90% from income, which is backed by investment grade covenants, and that is versus a sector average of around 57%. What that means for us is that our returns are not reliant on valuation movements. They are certainly very resilient, and definitely for us, a more reliable source of long-term returns.

[Mike Perkins, CFO at Supermarket Income REIT]

As Rob mentioned at the start, we have been very busy in the debt capital markets, done approximately GBP 1 billion of refinances in the year. What we have shown on the left there was our maturity profiles of June 2025, where maturities were far more concentrated and our average maturity of 2.8 years and the activity we have done since then, which include our debut bond, include the refinancing of the RCFs that we undertook just after year end. We have improved that maturity profile to 3.6 years, despite the passage of one year's time. Importantly, no refinancings until June 2028. The refinancings that we did in the RCFs, we saw some healthy margin improvements. Our average cost of debt today is around 4.4%. 98% of that is fixed or hedged until June 2028. We can withstand any near term volatility in interest rates.

[Mike Perkins, CFO at Supermarket Income REIT]

We are well-placed to deliver that kind of earnings growth and that minimum 2% dividend target. What is absolutely key for us is maintaining that BBB+ credit rating. We have shown on the left there, we will manage LTV through the cycle. Post-deployment of the equity raise, we are at 45% leverage, but we will still maintain a significant amount of headroom in our banking covenants. The viability assessment would show you would need to see a fall in valuations of about 27% before you sort of in breach of a covenant. We will monitor that, but equally we give equal prominence to net debt to EBITDA, which is something our rating agencies will look at.

[Mike Perkins, CFO at Supermarket Income REIT]

Our 7.8x net debt to EBITDA is significantly below the rating sensitivity and what you would expect to see as you get the full year's benefit of income from the assets we have just acquired. We would be operating at the lower end of that seven to eight times target. Look, we are well-placed to deliver our strategy. We have successfully deployed capital, completing GBP 676 million of earnings enhancing acquisitions. We have built a scalable platform with one of the lowest cost ratios in the sector, and delivered a 7.5% total accounting return for this year, which is underpinned by highly secure investment grade income. I will hand you back to Rob to go through the market investment update.

[Rob Abraham, CEO at Supermarket Income REIT]

Thank you, Mike. Look, omnichannel grocers continue to dominate the grocery market, and we have Tesco as our largest tenant on the left-hand side, and we are Tesco's largest landlord. Their total revenue is GBP 44 billion a year. Their market share in the U.K. is 28%, and that increases to 37% in the online channel. The strap line at the bottom there, omnichannel grocers is the best place to win through scale. Not only that, it is the scale of their large format store estates that cannot be replicated, that are a very high barrier for other operators to compete with. What we are seeing is omnichannel stores capturing the majority of sales growth. On the left-hand side, online is growing at double digits. This is from Tesco's full year results.

[Rob Abraham, CEO at Supermarket Income REIT]

The last two years, you can see that online growth very strong, and that gets fulfilled through the store networks. It is the stores that we own that provide that. Then the large format stores that you combine online with, so in-store sales in large format stores growing around 4% a year. In that same time, convenience has been broadly flat. Omnichannel stores is the main driver of the growth. That means it is profitable growth for the operators because they are not having to invest in creating new space to capture that like for like growth. The reason why consumers prefer these large format stores is because they provide better value and greater choice. On the left-hand side, Tesco Express, if you do your weekly shop there compared to in a large format store, the annual saving is about GBP 800.

[Rob Abraham, CEO at Supermarket Income REIT]

On the right-hand side, items in a large format store are often 10%-20% cheaper. You get a much larger product range at 20,000-30,000 products. Not only that, the chance of the product you want being in stock is much higher at 91%+, compared to 82% in convenience. What we are therefore seeing is at our portfolio level, and this is an example. This chart is the sales data from one of our stores in our portfolio. We are seeing that turnover grow over the last three years by 18%, and the rents are up only 12% in the same period. That means the rent relative to the store turnover, that ratio has improved from 4.1% to 3.9%.

[Rob Abraham, CEO at Supermarket Income REIT]

That means that as we get those contractual uplifts that you can see in the rent on the chart there, as we get those uplifts, it is absolutely affordable for the tenants. The omnichannel stores we own are also great drivers of footfall. This is one of the retail parks we own in Bristol. We are extending and building a new Lidl on the retail warehousing terrace. It has got a 20-year lease, it has got inflation rent reviews, and the yield on cost is very attractive at 8%. This is just one of the ways we are able to actively manage the sites and drive value.

[Rob Abraham, CEO at Supermarket Income REIT]

If we zoom in on that retail warehousing line up, what you can see is that we had Argos, which was paying rent but was not trading from the site because it had relocated into the nearby Sainsbury's, and therefore that Argos, at the end of the lease, would have gone vacant. Also concessionary lettings to One Beyond and Poundstretcher. We combined those two units in the middle to create a new B&M on a 10-year lease. We also renewed the Boots lease for five years. That combined that with the Lidl, we have now got 100% occupancy. We have added six years to the average lease length. We are now full of national retailers. The rental income is up GBP 400,000 a year. We are expecting a 10% valuation increase.

[Rob Abraham, CEO at Supermarket Income REIT]

Very attractive returns, and this is just one of the ways where we have greater site control that we can extract value. We also renewed two leases in July. These stores, large format, top performing omnichannel stores, reset the term to 15 years in each case. Extensions of nine years and eight years respectively. In one case, the rent came down 15%, but the other store renewed at passing rent, so the average reduction across the two was 7%. Worth noting that there were no. Normally you might get in other areas of commercial property, you would get a rent-free period. For a 15-year term, that could even be 18-months+ of rent free. There is no rent-free periods here. There are no landlord capital contributions.

[Rob Abraham, CEO at Supermarket Income REIT]

Through these lease renewals, we expect the valuation of the properties to go up, which enhances our total return. Aside from where we are renewing leases, we are also seeing, and I mentioned this earlier, the evidence where Homebase stores have been converted into new food stores, M&S particularly taking some of those. Sainsbury's also took 12 of those. New 20-year index-linked leases being signed at GBP 24 and GBP 28 per sq ft. That is starting to feed into open market rent reviews. There is a Waitrose example in Surrey, where that store has seen a 16% uplift to open market review as a result of that evidence being seen elsewhere. In that context, our current rents are very much affordable, GBP 23 per sq ft, average rent to turnover of 4%, very affordable. The investment markets, just some interesting data points that are being seen.

[Rob Abraham, CEO at Supermarket Income REIT]

We did not buy these. They were bought by what you might call core capital. Sainsbury's in Hertfordshire with open market reviews of 5% net initial yield. That has a 15-year lease, and at 5%, it means the purchaser is expecting open market growth under the open market rent reviews. Also a Lidl sale and leaseback priced at a 4.8% net initial yield. A very strong yield, relative to where you might see the cost of money today. Lastly, a Morrisons in Plymouth, 22 years on that lease, 6.1% on the yield. You get a bit of a discount, a bit of additional yield to reflect the fact that the tenant is sub investment grade. The point for us is we looked at those opportunities, but we have seen better value elsewhere in the investment market.

[Rob Abraham, CEO at Supermarket Income REIT]

We have executed GBP 676 million of earnings accretive acquisitions across a range of strategies you can see on the page. I mentioned earlier, as we grow, we can maintain the attractive fundamentals. Sat at a 6.5% net initial yield, so it is accretive, 13 year average lease length, 94% of the income is inflation linked and 74% is investment grade. As I say, very much supporting those attractive portfolio fundamentals. In summary, we are well positioned to continue to grow from here. It has been a highly active year of significant strategic progress for us. We have been delivering on the business plan and the strategy that we set out. We are also targeting a strong total return that is backed by high quality income. Of course, Sainsbury's, Tesco, investment grade type operators on long leases, with inflation linkage. Very much an income based return profile, which is very defensive.

[Rob Abraham, CEO at Supermarket Income REIT]

We have also got these very interesting multiple avenues to grow and drive shareholder returns across those different strategies. Thank you for listening to the presentation. With that, we will turn to the questions. There is one here which Mike can talk to, but worth just being clear on percentage dividend cover for this year and where you expect it to be going forwards.

[Mike Perkins, CFO at Supermarket Income REIT]

Yeah. So dividend cover for this year was 93%, for the reasons we set out. There was some cash drag as we were redeploying the capital and the uptick in debt costs as we executed our bonds, and our financing strategy. But, in terms of where we are today, they were kind of one-off impacts. As we messaged in our equity raises, though, we would expect to be fully covered from the first full financial year after the equity raise. Analyst consensus will have us very close to dividend cover for FY 2027 and fully covered thereafter. For us, the reason why we were talking to that sort of minimum uplift in our dividend guidance, is the key for us is that the dividend is sustainable. So 2% for us today is a sustainable dividend that we know we can cover with earnings.

[Mike Perkins, CFO at Supermarket Income REIT]

The next job, because, sorry, there is a question here around our dividend policy, is that sort of guidance of 2% is the minimum target now. Our job is to try and grow it by more like what we are getting at the top line in terms of inflation and passing that through. A lot of the work we have done this year is designed to kind of get back to the point where our dividend is covered, which we have done. We have shown that, and we would expect to cover to come through in the next financial year.

[Rob Abraham, CEO at Supermarket Income REIT]

Thank you, Mike. I will take the next one just about any evidence the top tier operators are looking to accelerate their efforts to own more of their own stores. We continue to see Tesco buying individual stores in. They do not buy everything, but it does just give good evidence of exactly how strategically important these stores are to the operators. So Tesco bought about seven stores in the last year, so continue to do that. Sainsbury's do not buy individual lots in the secondary market, but they did buy a joint venture back from us a few years ago. So yeah, very much proving the strategic importance of those. There was a question about our ambition to double in size and what timeframe this might be on.

[Rob Abraham, CEO at Supermarket Income REIT]

So, look, we deliberately haven't given a timeframe because the ambition to double in size is an ambition, but it's not growth for the sake of it. It needs to be accretive. The numbers need to work, and therefore, we will only grow if it makes sense to do so. That said, to double in size, we need to grow by GBP 2 billion of assets. In the last year, we've acquired GBP 676 million. So it gives you a sense that in the right environment, it may take as little as two to three years. But it certainly will need to stack up to do that for us to make that decision. Mike, maybe to you to take the second point of, do you expect any material increase in leverage?

[Rob Abraham, CEO at Supermarket Income REIT]

Then there's another related question, just around what would need to happen for us to be under stress on the debt covenants.

[Mike Perkins, CFO at Supermarket Income REIT]

Certainly. So, as we showed, leverage today is 45%, and I think that is probably more of an upper limit for us. It might be that if we wanted to execute a transaction that we might drift a little bit higher, but we're always looking to bring it back down to kind of 45% and below. As I said, we do look at leverage in terms of maintaining that kind of covenant headroom. So if you look at the valuation reduction in order to breach a covenant, it's about 27%, 28%, and the last post the mini budget super property values fell by 14% and certainly since then we've seen our valuations broadly flat. I would probably add to that we have sold into the JV GBP 635 million of assets. They've all been at a premium to the prevailing book value.

[Mike Perkins, CFO at Supermarket Income REIT]

So we're very confident in where our valuations are. Then obviously we look to that kind of net debt EBITDA as well is another key rating for us. At low sevens, again, operating with significant headroom to our credit rating covenants. So we feel comfortable where we are today, but I don't think you'd expect us to take leverage materially higher where it is today.

[Rob Abraham, CEO at Supermarket Income REIT]

Thank you, Mike. I will take the next one just about European food stores, which tenants in countries other than Carrefour. What are our thoughts on concentrations of Carrefour in the portfolio? We did 12 months of work before we went into France. We need to make sure we really know our stuff before going into a new market. There are lots of considerations around structuring and tax aspects. We are working on that at the moment. The geographies that maybe seem more interesting or more likely at the moment would be Spain, Portugal, Ireland. The maybes would be Italy or Germany. It really depends as well on the pipeline. A neat new geography, way to go into a new geography may be to do it with an existing tenant. We would be open-minded to say Carrefour in Spain, perhaps. But it is early days on that front.

[Rob Abraham, CEO at Supermarket Income REIT]

We are certainly not rushing into it. You also saw our most recent raise in deployment was all in the U.K. So the pipeline remains very strong in the U.K. as well. There is a question about the equity raise, and why retail investors were not given longer to participate. There is a point here around when we raise capital in the current environment. The retail investors were given the same amount of time as the institutional investors, but it is a reasonably short window. We were very pleased we got about GBP 10 million of backing, so around 10% of the raise came from retail money. That came through RetailBook, which works with all of the major platforms, so the likes of Hargreaves Lansdown, AJ Bell, et cetera. What I would say is you just need to make sure you have the alerts on.

[Rob Abraham, CEO at Supermarket Income REIT]

In the current environment, we used to raise and keep the window open for two weeks at a time. But with so much macro volatility, you just do not know what is going to happen day to day. So we just had to keep it reasonably short, which is the way the market has gone. That is not to say it will always remain that way going forward, but, I would ask that you make sure you have got all of the alerts set up, both to when we issue RNSs or with the retail platforms, to give you the best chance of being able to participate. Where next? Mike, CapEx?

[Mike Perkins, CFO at Supermarket Income REIT]

Yeah. So there is a question around how much CapEx we are investing in the Lidl development. It will be low single digit millions. It is more of a forward funding arrangement, so we have not actually spent any money yet. We have got a commitment to buy it. We expect that to go in early next year. So it is low single digit millions. The point of the Lidl thing for us is that it is managing our estate effectively. So there is never going to be massive needle moves in terms of capital we need to deploy or impact on the wider portfolio, but it is just being efficient and driving NOI where we can. So yeah, low single digit millions.

[Rob Abraham, CEO at Supermarket Income REIT]

Thank you, Mike. Do you see the installation of car park solar similar to the 50% rule in France as a potential driver of cash generation not currently utilized in the U.K. market? Yes, certainly we know the operators are looking at car port solar. Bearing in mind of our Supermarket Income REIT site, the car park is probably 75% of the whole site, and it should be easier to put solar above car parking spaces maybe than on the roof of the store itself. Yes, I think we will see that over time, particularly as solar panel technology has gotten better. There may well be an opportunity for us to fund some of that for the tenants. It depends really, but yeah, it is all a positive in that respect. There was a question around has the JSE listing been positive for the company?

[Rob Abraham, CEO at Supermarket Income REIT]

Certainly, last year, we saw the JSE register get to about 4% of our share register, which means we had 4% of share buying, at a time when real estate markets or the U.K. listed real estate market was, I think fair to say, quite tough. So having a market that moves in different directions or in different ways to our core U.K. market is quite helpful to have that ability to transfer shares into the JSE. Mike, do you want to take the one on indexed rent reviews?

[Mike Perkins, CFO at Supermarket Income REIT]

Yeah. Certainly. So, a question around kind of the ability for us to capture inflation if it exceeds materially the Bank of England's target. So yeah, look, the typical lease structure for us is there will be a cap and a collar. Our average cap is 4%. So yes, look, in periods where inflation runs ahead of that 4%, we do not capture all of it. But what that would mean and what we have seen in the past is that store level performance will improve. So whilst you do not get all of the inflation capture, it makes our rents more affordable at the sort of rent relative to turnover metrics. So, we would expect to kind of, as we said, it is not a bad thing for us. The one in four is typical in these structures.

[Mike Perkins, CFO at Supermarket Income REIT]

And if there was a spike in inflation, what we have seen in previous cycles is, it is momentarily an increase, but it just makes our rents more affordable. So therefore pushes rents on for us. So, yeah, hope that is answered the question.

[Rob Abraham, CEO at Supermarket Income REIT]

Thank you, Mike. That is all of the questions. Thank you all for taking the time, and thank you all for the support. We are very much active on our plan to grow, but as we say, it needs to be accretive to shareholders. It needs to be driving value. The pipeline is interesting, and we think there are opportunities there that will deliver value for our shareholders, and we have got various routes for funding that pipeline. I guess watch this space really.

[Operator]

Perfect. Thank you guys. Could I please ask investors not to close the session as you will now be automatically redirected to provide your feedback. On behalf of the management team of Supermarket Income REIT PLC, we would like to thank you for attending today's presentation and good day.

Participants

Executives

• Rob Abraham, CEO
• Mike Perkins, CFO