Supermarket Income REIT plc (SUPR · LSE)
The Landlord Behind Your Weekly Shop
It owns the big supermarket buildings that Tesco, Sainsbury's, Asda and Carrefour trade from, and collects long, inflation-linked rent from them.
Bull case for Supermarket Income REIT plc
Inflation linked rents from big supermarket brands
Most rent rises with inflation each year and comes from large, financially strong supermarket chains
Stores double as online delivery hubs
Grocers also fulfil most online orders from these stores, making the assets a beneficiary of shift to online shopping
Food shopping holds up in downturns
Supermarkets are able to pass cost rises on to shoppers, protecting margins and keeping rents affordable through tough times
Bear case for Supermarket Income REIT plc
Borrowing costs squeeze the dividend
Higher interest costs on refinanced debt eat into the cash available to pay shareholders
Only a handful of tenants matter
Tesco and Sainsbury's rent dominates income, so trouble at either would hurt badly
Buying growth needs cheap capital
The plan to double the portfolio depends on raising money at attractive cost