| Valuation method | Value, £ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 57.26 | -31 |
| Intrinsic value (DCF) | 31.83 | -62 |
| Graham-Dodd Method | 0.24 | -100 |
| Graham Formula | 0.73 | -99 |
Supermarket Income REIT plc (LSE: SUPR) is a specialized real estate investment trust (REIT) focused on grocery-anchored properties in the UK. The company invests in omnichannel grocery stores that serve both online and in-store shoppers, making them a critical part of the UK's food supply infrastructure. With a portfolio of 45 properties leased to leading UK supermarket operators, Supermarket Income REIT benefits from geographic and tenant diversification, reducing concentration risk. The REIT operates in the retail real estate sector, providing investors with exposure to defensive, necessity-based retail assets that demonstrate resilience during economic downturns. Its properties are strategically located to serve high-density population areas, ensuring stable rental income. The company's focus on grocery real estate aligns with long-term trends in e-commerce and essential retail demand, positioning it as a key player in the UK's commercial property market.
Supermarket Income REIT plc offers investors exposure to a defensive segment of the UK real estate market, with grocery-anchored properties providing stable, inflation-linked rental income. The company's focus on omnichannel grocery stores aligns with evolving consumer trends, supporting long-term occupancy stability. However, the REIT reported a net loss of £21.2 million in its latest fiscal year, raising concerns about profitability despite strong operating cash flow of £92.1 million. The dividend yield appears attractive at 6.105p per share, but investors should assess sustainability given the negative EPS. With a low beta of 0.60, the stock may offer lower volatility compared to broader equity markets, making it a potential hedge in uncertain economic conditions. Risks include tenant concentration, rising interest rates impacting debt costs, and potential shifts in grocery retail dynamics.
Supermarket Income REIT plc differentiates itself by specializing exclusively in UK grocery-anchored properties, a niche that provides resilience compared to general retail REITs. The company's focus on omnichannel-capable stores positions it well against e-commerce disruption, as grocery remains a necessity-driven sector with lower online penetration than other retail categories. Its tenant base consists of leading UK supermarket operators, ensuring high credit quality and lease stability. However, the REIT's concentrated exposure to the UK grocery sector could be a limitation if the market faces structural challenges. Compared to diversified retail REITs, Supermarket Income REIT lacks geographic diversification outside the UK. The company's competitive advantage lies in its specialized asset selection and long-term inflation-linked leases, which provide predictable cash flows. However, its smaller scale relative to larger REITs may limit bargaining power with tenants and access to financing. The defensive nature of its assets provides stability but may limit growth during strong economic expansions when discretionary retail outperforms.