REG - Supermarket Inc REIT - Audited results for the year ended 30 June 2025
Today 07:00
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RNS Number : 6101Z Supermarket Income REIT PLC 17 September 2025
SUPERMARKET INCOME REIT PLC
(the "Company", "SUPR" or together with its subsidiaries the "Group")
AUDITED RESULTS FOR THE YEAR ENDED 30 JUNE 2025
A TRANSFORMATIONAL YEAR POSITIONING THE COMPANY FOR INCREASED SCALE AND
EARNINGS GROWTH. DEMONSTRATING ALIGNMENT WITH SHAREHOLDERS, ASSET VALUATIONS
AND AFFORDABILITY OF RENTS.
The Board of Directors of Supermarket Income REIT plc (LSE: SUPR, JSE: SRI),
the real estate investment trust, reports its audited consolidated results for
the Group for the year ended 30 June 2025 (the "Year").
FINANCIAL HIGHLIGHTS
12 months to 12 months to
30-June-25 30-June-24 Change in Year
Net rental income £113.2m £107.2m +6%
EPRA earnings per share(1) 6.0 pence 6.1 pence -2%
IFRS earnings per share 4.9 pence (1.7) pence n/a
Dividend per share declared 6.12 pence 6.06 pence +1%
Dividend cover(1)(, 3) 0.98x 1.01x n/a
EPRA cost ratio(1) 13.0% 14.7% n/a
30-June-25 30-June-24 Change in Year
Portfolio valuation(2) £1,625m £1,776m -8%
Portfolio net initial yield(1)(,) (2) 5.9% 5.9% n/a
Investment in Joint Venture £96.6m - n/a
EPRA NTA per share(1) 87.1 pence 87.0 pence -
IFRS NAV per share 88.5 pence 89.8 pence -1%
Loan to value(1)(,) (2) 31% 37% n/a
Significant strategic milestones achieved
· Positioned for materially improved earnings and dividend cover
o Internalisation to deliver £4 million of expected cost savings and clear
alignment between the Company, management team and shareholders
o Committed to being one of the lowest cost companies in the sector
targeting below 9% EPRA cost ratio
o Debut sterling bond issuance fixing £250 million of debt costs for 6
years at 5.125% coupon
· Active capital recycling proving asset valuations and releasing
capital for reinvestment
o Strategic £403 million Joint Venture (the "JV") with funds managed by
Blue Owl Capital ("Blue Owl") at 3% premium to 31 December 2024 book value
§ SUPR holds a 50% interest in the JV and realised c.£200 million of
net proceeds to deploy into an attractive pipeline of investment opportunities
o Sale of Tesco, Newmarket for £63.5 million at 7.4% premium to 30 June
2024 book valuation
o Active capital recycling has resulted in a marginal decline in EPRA
earnings per share of 2%, which reflects temporary cash drag as the Company
continues to redeploy the net proceeds from the JV
· Renewed leases on the three shortest leased supermarkets
demonstrating affordability of rents
o Extended leases to 15 years with RPI linked annual reviews
o New starting rents in line with acquisition underwrite at 4% rent to
turnover, 35% ahead of MSCI supermarkets average rent per sq.ft. and 13% above
valuer's ERVs
· Secondary listing on the JSE broadening SUPR's exposure to
international investors
Positioning for future growth
· FY26 target dividend increased to a minimum of 6.18 pence per share
· Reduction in EPRA cost ratio of 1.7% during the year, with additional
reductions expected in FY26, reflecting a full year of benefits from
Internalisation cost reductions
· LTV of 31% as at 30 June 2025 (30 June 2024: 37%) providing capacity
for growth through increased leverage to fund earnings accretive acquisitions
(current LTV of 34%)
· 100% occupancy and 100% rent collection(4) since IPO
o Income backed by the leading and largest operators in the
non-discretionary grocery sector
· c. £450 million of liquidity in the form of cash and undrawn
committed facilities
· Fitch BBB+ investment grade rating reaffirmed providing access to
attractively priced long-dated debt
· Post balance sheet debut £250 million oversubscribed sterling bond
issuance with a six-year term and a fixed coupon of 5.125%
Earnings accretive acquisitions
· Acquired a Sainsbury's store in Huddersfield for £49.7 million at a
7.6%(5) net initial yield ("NIY")
· Acquired nine Carrefour assets in France through a sale and leaseback
for a total purchase price of €36.7 million(6), at a portfolio NIY of 6.8%
· Post balance sheet acquisitions include a Tesco store in Ashford for
£54.1 million at a 7.0%(7) NIY and a Waitrose store in Anglesey for £4.8
million at a 6.1%(8) NIY.
Strong grocery sector growth
· The non-discretionary grocery market continues to demonstrate growth
and resilience
· UK grocery market has shown consistent growth, with sales up 5.4%
year on year in July 2025(9) and forecast to grow to £259 billion in 2025(10)
o Tesco and Sainsbury's increased sales and market share in the year with a
combined 43% market share(11)
o Total online market share at 12% and growing(11)
· French grocery market sales forecast to reach €329 billion in 2029,
representing 3% annual growth(12)
o Carrefour has a 21.5% market share in France, an increase of 2.2
percentage points since June 2024.(11)
o Online is one of the fastest growing channels experiencing 88% growth
between 2018 and 2025(12), accounting for approximately 10% of the market
Material cost savings and increased alignment with shareholders
· Internalisation of the management function expected to deliver at
least £4 million of annual cost savings
· Reduced EPRA cost ratio to 13%, targeting further cost efficiencies
in FY26 with the aim of achieving below 9%, among the lowest in the sector
· Broader investor appeal with the transfer of listing from the
closed-ended investment fund category to the equity shares (commercial
companies) category of the Official List
Supermarket property valuations increasing
· The Company's portfolio valuation increased by 1.9%(13) on a
like-for-like basis
· NIY of 5.9% (30 June 2024: 5.9%)
· The Company acquired £81.2 million(14) of assets at an average yield
of 7.3%, representing an attractive 2.3% spread to the incremental cost of
debt
· The Company disposed of £466.8 million(15) of assets, highlighting
strong demand for omnichannel stores
o Tesco, Newmarket: sold to Tesco plc for £63.5 million, 7.4% above book
value(16)
o Eight stores in the 50:50 JV: £403.3 million, 3% above book value(17)
· Constrained transaction volumes with potential sellers choosing to
hold on to assets, placing upwards pressure on valuations
Further progress on key sustainability initiatives
· EPRA Sustainability Best Practices Recommendations ("sBPR") Silver
and Most Improved Awards
· First Climate Transition Plan published
· Improved ESG data collection processes with electricity and natural
gas data collected from all supermarket tenants
· Strong tenant net zero commitments continue to drive significant
tenant capital expenditure on stores
· EV charging operational at 38% of sites and solar arrays operational
across 16% of stores in the Portfolio
· Awarded sixth consecutive EPRA Gold award for governance
Robert Abraham, CEO of Supermarket Income REIT plc, commented:
"This has been a transformational year for SUPR which has positioned the
Company to return to growth. The team has delivered shareholder value through
a number of key strategic milestones, most notably the Internalisation which
will deliver significant cost savings and provides greater alignment with
shareholders. We have proactively sought to deliver further shareholder value
through establishing a £403 million JV, issuing our debut £250 million
sterling bond, demonstrating the affordability of rents and validating asset
valuations, whilst broadening our investor base through our secondary listing
on the JSE.
The investment case for supermarket real estate is as compelling as ever and
our relationship led model combined with sector specialism allow us to unlock
attractive opportunities for shareholders. Our portfolio of 82(18)
high-quality foodstores let to operators of significant scale, under triple
net leases with contractual inflation linked uplifts, enables us to deliver an
efficient platform with a falling cost ratio.
We remain focused on delivering shareholder value as we look to scale the
platform further. Our team of grocery sector specialists continues to
demonstrate its ability to originate and execute on an attractive acquisition
pipeline of earnings enhancing opportunities. Through this pipeline we expect
to deliver a growing and fully covered dividend."
PRESENTATION FOR ANALYSTS
The Company will be holding an in-person presentation for analysts at 08.30am
today at FTI Consulting's offices, 200 Aldersgate, Aldersgate Street, London,
EC1A 4HD. To register to attend in-person, please contact FTI Consulting:
SupermarketIncomeREIT@fticonsulting.com. There will also be a webcast
available. To join the presentation via the webcast, please register using the
following link:
Supermarket Income REIT - Full Year Results Presentation 2025 | SparkLive |
LSEG
(https://gbr01.safelinks.protection.outlook.com/?url=https%3A%2F%2Fsparklive.lseg.com%2FSupermarketIncomeREIT%2Fevents%2Fd57cca02-ac79-4513-bfe6-9acb28a657f3%2Fsupermarket-income-reit-full-year-results-presentation-2025&data=05%7C02%7CSadie.Ward%40suprplc.com%7C3e2021d842d343e1106d08ddf14aecd3%7C249b9cf116fd4643bbfc5c600a80384a%7C0%7C0%7C638932026289400240%7CUnknown%7CTWFpbGZsb3d8eyJFbXB0eU1hcGkiOnRydWUsIlYiOiIwLjAuMDAwMCIsIlAiOiJXaW4zMiIsIkFOIjoiTWFpbCIsIldUIjoyfQ%3D%3D%7C0%7C%7C%7C&sdata=pkuW3WW6FNgx8%2BRJ%2FV1F3FYLz3wRKmx269AIaR4gJzM%3D&reserved=0)
The results presentation is available in the Investor Centre section of the
Group's website.
FOR FURTHER INFORMATION
Supermarket Income REIT plc ir@suprplc.com
Rob Abraham / Mike Perkins / Chris McMahon
Stifel Nicolaus Europe Limited +44 (0)20 7710 7600
Mark Young / Rajpal Padam / Catriona Neville
Goldman Sachs International +44 (0)20 7774 1000
Tom Hartley / Luca Vincenzini
FTI +44 (0)20 3727 1000
Consulting
Dido Laurimore / Eve Kirmatzis / Andrew Davis SupermarketIncomeREIT@fticonsulting.com
NOTES TO EDITORS:
Supermarket Income REIT 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 portfolio was valued at £1.8 billion as at 31 December 2024.
The Company's properties earn long-dated, secure, inflation-linked, growing
rental income. SUPR targets a progressive dividend and the potential for long
term capital growth.
The Company's shares are traded on the LSE's Main Market and on the Main Board
of the JSE Limited in South Africa.
Further information is available on the Company's
website www.supermarketincomereit.com (http://www.supermarketincomereit.com/)
LEI: 2138007FOINJKAM7L537
Stifel Nicolaus Europe Limited, which is authorised and regulated in the
United Kingdom by the Financial Conduct Authority, is acting exclusively for
Supermarket Income REIT plc and no one else in connection with this
announcement and will not be responsible to anyone other than the Company for
providing the protections afforded to clients of Stifel Nicolaus Europe
Limited nor for providing advice in connection with the matters referred to in
this announcement.
Goldman Sachs International, which is authorised by the Prudential Regulation
Authority and regulated by the Financial Conduct Authority and the Prudential
Regulation Authority in the United Kingdom, is acting exclusively for
Supermarket Income REIT plc and no one else in connection with this
announcement and will not be responsible to anyone other than the Company for
providing the protections afforded to clients of Goldman Sachs International
nor for providing advice in connection with the matters referred to in this
announcement.
CHAIR'S STATEMENT
Dear Shareholder,
I am pleased to present the Company's first results as an operating REIT,
following the internalisation of its management function ("Internalisation")
in March 2025. The Internalisation, which I discuss in more detail below, was
a key milestone among several achieved in a transformational year for the
Company. These accomplishments have positioned the Company to capitalise on
the compelling investment opportunities that we are seeing at this stage of
the real estate cycle.
In November 2024, we set out a series of key strategic initiatives, aimed at
reducing costs, delivering sustainable and growing earnings, and ultimately
narrowing the share price discount to NTA. Having successfully delivered on
these initiatives, including recycling capital, lease renewals on three of our
supermarkets and completing the Internalisation of the business, it is
encouraging to see a positive market response. In the calendar year-to-date,
SUPR's share price has risen 16%, versus the FTSE EPRA NAREIT UK Index which
is down 2% (based on the closing share price as at 15 September 2025) and the
discount to NTA has narrowed markedly. However, we recognise that there is
still more work to be done.
These strategic initiatives have evidenced the affordability of rents across
our high-performing omnichannel supermarket portfolio, supported our asset
valuations, and demonstrated strong alignment with shareholder interests, as
described below.
Demonstrating affordable rental levels. In February, lease renewals for the
Company's three shortest-leased stores provided clear evidence of the
above-average affordable rental levels for our high-quality stores. New
15-year leases were agreed with Tesco, featuring inflation-linked annual
uplifts. The day one starting rents on these renewed leases were struck at an
average of 35% above the MSCI supermarket rental index and 13% ahead of our
own valuer's Estimated Rental Values ("ERVs"), highlighting the above average
rents that operators are prepared to pay for continued access to stores in our
high-quality portfolio of grocery assets.
Demonstrating asset valuations. The Company completed two key disposals this
year, crystalising the market value of the Company's assets.
Tesco, Newmarket: We sold this store to Tesco for £63.5 million, at a net
initial yield of 5.2%(19) and 7.4% above the June 2024 book value,
highlighting the strong demand for low-yielding omnichannel stores. Tesco's
purchase of the store also underlines the asset's strategic importance to the
operator.
Strategic joint venture ("JV"): In April, SUPR formed a strategic JV with
funds managed by Blue Owl Capital, a global asset manager with $284+ billion
of assets under management. The JV was seeded with eight of SUPR's
high-yielding supermarkets, which were transferred into the JV at 3% above the
December 2024 book value. SUPR retained a 50% stake in the JV, generating
c.£200 million in net proceeds and will receive an ongoing management fee
enhancing the Company's earnings. The JV further supported SUPR's asset
valuations, endorsed our investment thesis, and unlocked additional capital
for further acquisitions while preserving future growth optionality.
Demonstrating alignment with investors. In March this year, the Company
internalised its management function, delivering significant benefits for
shareholders. Firstly, the Internalisation is on-track to deliver the expected
c.£4 million of annual cost savings. The benefits of these cost reductions
are already evident in our EPRA cost ratio which has reduced from 14.7% to
13.0% reflecting savings made during the year and we are on-track to see the
full benefits in FY26. With the annual savings realised from the
Internalisation, we are targeting one of the lowest EPRA cost ratios in the
sector-below 9%-to deliver a highly efficient platform for our shareholders.
As we continue to scale the business, we are confident in our ability to drive
these costs even lower.
The Internalisation also provides greater alignment between management, the
Board and shareholders and we are delighted to welcome Rob Abraham, CEO, and
Mike Perkins, CFO, to the Board as Executive Directors. The Board would like
to extend its thanks to the Atrato team for their contribution to the growth
of the Company since its IPO.
Listing Changes. The Company completed a secondary listing on the Johannesburg
Stock Exchange ("JSE") in December enhancing its profile with a broader
investor base and I am pleased to welcome our new South African shareholders
to the register. Following completion of the Internalisation, the Company also
secured shareholder support to change its UK listing to the equity shares
(commercial companies) category of the Official List, which has, among other
things, enhanced efficiency, operational flexibility and the attractiveness of
the Company to investors in the UK and overseas.
Governance. The Nomination Committee continues its succession planning. Sapna
Shah, SID and Chair of the Nomination Committee, has overseen the appointment
of Roger Blundell to the Board to succeed Jon Austen as Audit & Risk
Committee Chair. As part of the Board's succession planning, Jon will step
down from the Board following the 2025 AGM as he approaches the end of his
nine-year term. On behalf of the Board, I would like to offer my sincerest
thanks to Jon for the huge contribution that he has made to the Company,
having served on its Board since the IPO in 2017.
Sustainability. We continue to put sustainability at the heart of the business
and this year I am pleased to report that in addition to the publication of
our inaugural Climate Transition Plan, we have published our third annual
sustainability report to coincide with the release of our TCFD compliant full
year results.
Post period end actions. Following the period end, the Company has reinforced
its commitment to delivering long-term shareholder value, with the earnings
enhancing acquisition of a Tesco supermarket in Ashford, a top performing
foodstore, marking the first reinvestment of proceeds from the JV. The Company
also issued its first sterling bond which secures long-term financing at an
attractive fixed rate. The investment grade bond enhances the Company's
financial flexibility and the potential earnings accretion of the acquisition
pipeline as the business continues to scale.
Outlook
With a fully aligned internal management structure now in place, supported by
a high-calibre team of sector specialists, we believe we are well positioned
to deliver significant long-term value for shareholders. The Company's
supermarket tenants continue to perform strongly with the non-discretionary
and highly resilient grocery market benefitting from an extended period of
food price inflation and sales growth across the market.
The Board recommends a minimum target dividend of 6.18p for the year ending
June 2026. While our near-term focus remains on delivering a growing and fully
covered dividend, ultimately our aim is to position the Company to deliver
dividend growth ahead of that seen in recent years, during which we have been
actively managing the impact of higher financing costs since 2022.
The Company has delivered a huge amount of progress this year and I am pleased
with the positive response from our shareholders. The Company has demonstrated
its agility and innovation, evidenced through strategic transactions such as
the JV which attracted a strategic partner, warehoused future pipeline,
released capital and leveraged our team's sector expertise to generate
additional earnings through the ongoing management fee. We have a current and
compelling pipeline of opportunities, access to capital and the right team to
deliver them. I look forward to updating the market as we maintain the pace of
activity and creativity displayed this year, and as we continue to grow the
business and deliver long-term value for shareholders.
Nick Hewson
Chair
16 September 2025
KEY PERFORMANCE INDICATORS
We set out below the key performance indicators for the Company.
KPI Definition Performance
1. Total Shareholder Return Shareholder return is one of the Group's principal measures of performance. 24.0% for the year to 30 June 2025 (30 June 2024: 1.8%)(20)
Total Shareholder Return ("TSR") is measured by the movement in share price
over the period plus dividends reinvested in shares on the ex-dividend date,
expressed as a percentage of the share price at the start of the period.
2. Total Accounting Return Growth in the Group's NTA over a period plus dividends paid for that period 7.2% for the year ended 30 June 2025 (30 June 2024: 0.3%)
3. EPRA EPS* A measure of EPS designed by EPRA to present underlying earnings from core 6.0 pence per share for the year ended 30 June 2025 (30 June 2024: 6.1
operating activities. pence)
4. WAULT WAULT measures the average unexpired lease term of the Property Portfolio, 11 years WAULT as at 30 June 2025 (30 June 2024: 12 years)
weighted by rent.
5. EPRA NTA per share The value of our assets (based on an independent valuation) less the book 87.1 pence per share as at 30 June 2025 (30 June 2024: 87.0p)
value of our liabilities, attributable to shareholders and calculated in
accordance with EPRA guidelines. EPRA states three measures of NAV to be used;
of which the Group deem EPRA NTA as the most meaningful measure. See Note 30
for more information.
6. Net Loan to Value Net borrowings divided by the market value of investment properties reported 31% as at 30 June 2025 (30 June 2024: 37%)
on a proportionally consolidated basis.
*The Company previously included an additional earnings measure called
"Adjusted earnings" and "Adjusted EPS". The metric adjusted EPRA earnings by
deducting one-off items such as debt restructuring costs.
Following the updated September 2024 EPRA best practice recommendations
guidelines, the specific adjustments to EPRA earnings are now included within
the EPRA earnings calculation. As such the comparative period calculations in
the tables have been adjusted to reflect the new guidelines retrospectively.
The Group uses alternative performance measures including the European Public
Real Estate ("EPRA") Best Practice Recommendations ("BPR") to supplement its
IFRS measures as the Board considers that these measures give users of the
financial statements the best understanding of the underlying performance of
the Group's property portfolio. The EPRA measures are widely recognised and
used by public real estate companies and investors and seek to improve
transparency, comparability and relevance of published results in the sector.
Reconciliations between EPRA measures and the IFRS financial statements can be
found in Notes 12 and 30 to the financial statements.
EPRA PERFORMANCE INDICATORS
The table below shows additional performance measures, calculated in
accordance with the Best Practices Recommendations of the European Public Real
Estate Association (EPRA). We provide these measures to aid comparison with
other European real estate businesses.
For a full reconciliation of all EPRA performance indicators, please see the
Notes to EPRA measures within the supplementary section of the financial
statements.
Measure Definition Performance
1. EPRA EPS A measure of EPS designed by EPRA to present underlying earnings from core 6.0 pence per share for the year ended 30 June 2025 (30 June 2024: 6.1
operating activities. pence)
2. EPRA Net Reinstatement Value (NRV) per share An EPRA NAV per share metric which assumes that entities never sell assets and 96.0 pence per share as at 30 June 2025 (June 2024: 96.7 pence)
aims to represent the value required to rebuild the entity.
3. EPRA Net Tangible Assets (NTA) per share An EPRA NAV per share metric which assumes entities buy and sell assets, 87.1 pence per share as at 30 June 2025 (30 June 2024: 87.0 pence)
thereby crystallising certain levels of unavoidable deferred tax.
4. EPRA Net Disposal Value (NDV) per share An EPRA NAV per share metric which represents the shareholders' value under a 88.0 pence per share as at 30 June 2025 (30 June 2024: 89.6 pence)
disposal scenario, where deferred tax, financial instruments and certain other
adjustments are calculated to the full extent of their liability, net of any
resulting tax.
5. EPRA Net Initial Yield (NIY) & EPRA "Topped-Up" Net Initial Yield Annualised rental income based on the cash rents passing at the balance sheet NIY 5.8% & "Topped Up" 5.9% as at 30 June 2025 (30 June 2024: 5.9%)
date, less non-recoverable property operating expenses, divided by the market
value of the property, increased with (estimated) purchasers' costs.
6. EPRA Vacancy Rate Estimated Market Rental Value (ERV) of vacant space divided by ERV of the 0.3% as at 30 June 2025 (30 June 2024: 0.5%)
whole portfolio.
7. EPRA Cost Ratio (Including direct vacancy costs) Administrative & operating costs (including costs of direct vacancy) 13.0% for the year ended 30 June 2025 (30 June 2024: 14.7%)
divided by gross rental income.
8. EPRA Cost Ratio (Excluding direct vacancy costs) Administrative & operating costs (excluding costs of direct vacancy) 12.4% for the year ended 30 June 2025 (30 June 2024: 14.4%)
divided by gross rental income.
9. EPRA LTV Net debt divided by total property portfolio and other eligible assets, on a 36.1% as at 30 June 2025 (30 June 2024: 38.8%)
proportionally consolidated basis.
10. EPRA Like-for-like Rental Growth Changes in net rental income for those properties held for the duration of Rental increase of 2.4% for the year ended 30 June 2025 (30 June 2024: 2.1%)
both the current and comparative reporting period.
11. EPRA Capital Expenditure Amounts spent for the purchase and development of investment properties £82.1 million for the year ended 30 June 2025 (30 June 2024: £146.2
(including joint ventures and any capitalised transaction costs). million)
CHIEF EXECUTIVE'S REVIEW
Business Review
Chief Executive Robert Abraham.
A Transformational Year for SUPR
1) This year marked a pivotal moment for the business, with significant
milestones achieved and portfolio initiatives delivered in quick succession.
These accomplishments are the culmination of an extraordinary team effort,
driving real value for our shareholders.
2) Internalisation of the Company's management function delivering
material cost savings and enhanced alignment with investors.
3) Demonstrating the affordability of rents in our high-quality
portfolio through lease renewals as well as crystalising the value of our
assets through capital recycling.
4) The formation of the JV with a highly credible global real estate
investor in Blue Owl unlocked capital while providing further supporting
evidence for our investment thesis on higher yielding UK supermarkets. The JV
offers an attractive management fee and the ability to retain a stake in these
high-quality assets.
5) Public bond issuance had long been on our strategic agenda, and post
year-end, we acted swiftly to seize a window of opportunity for a
significantly oversubscribed £250 million debut bond issue - a testament to
the team's agility and readiness.
6) Investor interest continues to broaden, notably with the successful
JSE listing completed in December 2024. We're pleased to welcome our South
African investors, who now represent approximately 3% of our register. We look
forward to growing this in the coming years and further diversifying the share
register.
Opportunity for growth
1) With a strengthened balance sheet and access to capital at a
competitive cost across equity, debt, and joint ventures, we are well
positioned to execute on a compelling pipeline of assets, as we continue to
scale the business.
2) This pipeline provides attractive avenues for growth across the grocery
real estate spectrum while maintaining a focus on leading operators with
significant scale and market share.
3) New supply is entering the market through sale and leaseback
transactions for the first time in many years. These supermarket sites are
often top-performing grocery locations which have been operating for 30+
years.
4) The grocery real estate investment case remains highly compelling: a
sector underpinned by non-discretionary spend, national food infrastructure
and mission critical real estate for tenants.
5) Drivers for rental growth are evident: zero vacancy, mission critical
properties, strong grocery sales growth (particularly for omnichannel stores),
prohibitively high development costs and a shortage of prime locations (see
Sainsbury's acquisition of Homebase stores to convert into supermarkets).
6) Our internalised structure provides clear alignment with shareholders
and the desire to scale does not come at the cost of quality and delivering
sustainable returns.
The year in review
A year of significant achievements for the Company
FY25 has been defined by the successful delivery of the key strategic
initiatives which were announced in November 2024. Against a backdrop of
continued economic uncertainty, we have maintained our focus on proactively
seeking to drive value for our shareholders. From internalising our management
structure to launching a landmark JV with Blue Owl, SUPR has taken the
decisive and necessary steps to improve alignment with shareholders, reduce
costs, and enhance long-term earnings. We remain focused on capital recycling,
sustainability, and broadening our investor base. These achievements position
SUPR well for growth and a continued leadership in the UK grocery real estate
sector.
A team aligned with shareholders, delivering on strategic initiatives
1. Internalisation reducing costs and enhancing shareholder alignment
In March, we announced our intention to internalise the Company's management
function. The Internalisation offered compelling financial and strategic
benefits, including estimated annual cost savings of at least £4 million,
stronger shareholder alignment, a streamlined management structure and broader
investor appeal beyond externally managed vehicles.
The Board agreed to pay Atrato Group a £20.8 million termination fee which
secured the termination of the management contract and the transfer of SUPR's
staff and Intellectual Property ("IP") to the Company.
The Internalisation is on track to deliver significant cost savings of at
least £4 million per year which is equivalent to a c.19% yield on cost, the
highest return on capital of any available allocation option at the time of
Internalisation. The cost saving has a direct impact to SUPR's EPRA cost ratio
with our target of below 9% forecasted to be one of the lowest in the
sector.
EPRA cost ratios (including direct vacancy costs): FTSE350-listed REITs(21)
The internalised structure materially enhances shareholder alignment with the
Company able to retain a team of sector specialists whose goals and
remuneration are aligned with shareholder returns. The simplified management
structure also provides greater strategic flexibility to explore potential
future fee generating opportunities such as joint ventures and broadens SUPR's
potential investor universe.
2. Proving rents & outperforming ERVs
In February, we took the decision to agree lease renewals on the three
shortest leased Tesco stores in the Company's portfolio. We agreed new 15-year
leases with Tesco on supermarkets located in -Bracknell, Bristol, and Thetford
- at rents 35% above the MSCI supermarket benchmark index and 13% above the
Company's valuer's ERV. These leases included annual RPI-linked rent reviews
(capped at 4%, floored at 0%) and extended the portfolio WAULT from 11 to 12
years, with no major renewals now due until 2032.(22)
Average figures for the three supermarket lease renewals
Lease term 15 years (from average of 5 years)
Regear rent £28per sq. ft.
Vs. Valuer's ERV +13%
Vs. MSCI supermarket benchmark index +35%
Vs. Passing rent -20%
Rent to turnover(23) 4%
There was an average 20% reduction in passing rent on these stores which was
anticipated in our original acquisition price with our returns analysis guided
by the 4% rent to turnover benchmark. The three stores had previously been
valued at a c.7% NIY (due to their overrented nature ahead of the lease
renewal) compared to our portfolio level NIY of 6% at the time. Following the
lease renewals the three supermarkets have been revalued at an average NIY of
5.3% delivering a capital value increase of 8.0%.
This active management of the shorter leases in the Company's portfolio has
demonstrated the attractive supermarket rental levels that UK grocers are
willing to pay to secure long-term trading from a high performing mission
critical site. We believe this should release embedded value in the Company's
portfolio that is not yet reflected in valuations.
Long term projections for food price inflation and supermarket sales growth,
continue to underpin the affordability of rents in SUPR's portfolio.
A case study on this topic is available on page 21.
3. Capital recycling, proving valuations and growing earnings
During the year, we sold a Tesco store in Newmarket for a consideration of
£63.5 million representing a 7.4% premium to book value. This was acquired by
Tesco plc, underlining the strategic importance of strong trading, large
format, omnichannel stores to the supermarket operators.
The sale of this supermarket provided further market evidence of our ability
to crystallise valuations and release capital from a tight yielding asset
which can be redeployed into earnings enhancing opportunities.
In addition, we acquired one omnichannel store in the UK and a portfolio of
nine stores in France at a highly attractive spread to the cost of debt of
c.2.3%, these were:
· Sainsbury's, Huddersfield (7.6% NIY): an omnichannel store with an
11-year remaining lease term and annual RPI linked rent reviews (0% - 4%), for
£49.7 million (excluding acquisition costs). This store was subsequently
transferred as a seed asset into the JV. See page 20 for a detailed case study
on this store.
· Carrefour tranche two, France (6.8% NIY): a portfolio of nine stores
acquired via a direct sale and leaseback with Carrefour, for a total purchase
price of €36.7 million(24). The transaction was financed through a private
placement, with a maturity of seven years and a fixed rate coupon of 4.1%.
We have continued this investment cycle post-year end with two additional
acquisitions, totalling £58.9 million excluding transaction costs, including
a Tesco in Ashford and a Waitrose in Anglesey, at an average NIY of 7.0% with
annual inflation linked uplifts.
4. Growth through strategic partnership
In April, the Company entered into a strategic JV with Blue Owl, seeded with
eight of SUPR's high yielding, omnichannel supermarket assets from its
existing portfolio. The partnership marked Blue Owl's first investment into
the UK real estate market, endorsing SUPR's sector specialism and investment
thesis for mission critical grocery real estate.
SUPR will benefit from a management fee of 0.6% per annum of the gross asset
value on Blue Owl's stake in the vehicle, equating to c.£1.2 million, or
around 0.1p in additional annual earnings, and proceeds from the JV have
already begun to be deployed into earnings enhancing acquisitions.
The ambition is to grow the JV up to c.£1 billion in gross asset value over
the coming years. The JV transaction also enables SUPR to retain a stake in
the assets.
See page 26 for a detailed case study.
Continued progress on sustainability
Investing responsibly for long-term value creation is embedded in the
Company's business model.
The Company has published its third standalone Sustainability Report which
details its sustainability performance and priorities for the year ahead.
Sustainability highlights from the period include the enhanced ESG data
collection processes implemented to improve the completeness and accuracy of
the Company's GHG inventory, the publication of the Company's first Climate
Transition Plan, as well as further environmental and social asset management
initiatives to benefit both occupiers and local communities. The Company's
sustainability efforts have been recognised by the European Public Real Estate
Association ("EPRA"), with an EPRA Sustainability Best Practices
Recommendations ("sBPR") Most Improved Award and a Silver Award received in
September 2024 for the Company's inaugural EPRA sBPR reporting.
For the second time the Company has also undertaken external assurance over
its reported location-based Scope 1, 2 and 3 GHG figures for FY25. The
Assurance Report is available on the Sustainability page of the Company's
website.
· Refer to our standalone Sustainability Report for more
information.
Broadening SUPR's investor base
Along with achieving our strategic goals, we have sought to broaden the
Company's appeal to a wider investor base:
· Secondary listing on the JSE: in response to positive feedback and
strong demand from South African institutional investors, the Company
completed a secondary listing on the Main Board of the JSE in December 2024.
In March 2025 the Company was included in several South African indices, most
notably the FTSE/JSE All Share Index ("ALSI") and FTSE/JSE All Property Index
("ALPI") and has seen a positive response from South African Investors with
around 3% of SUPR's register currently on the JSE.
· Change in listing category: transferring from the closed-ended
investment funds category to the equity shares (commercial companies) category
of the Official List. This structure brings SUPR in line with peers in the UK
REIT space, provides the Company with more flexibility to execute transactions
as they arise and opens the Company to a wider range of potential investors.
We believe these initiatives, along with simplifying the management structure
through the Internalisation, will increase SUPR's appeal in the investment
community.
Outlook
Following the delivery of our stated strategic initiatives, SUPR is now a more
efficient, lower-cost business that is better aligned with shareholders and
overall, a more attractive investment proposition to current and prospective
shareholders.
The attractiveness of our supermarket investment thesis has been demonstrated
through the establishment of the JV which we aim to grow over time. The JV
warehouses a long-term asset pipeline while delivering near term capital for
us to deploy into earnings enhancing opportunities. We have already begun the
redeployment of the JV proceeds and look forward to executing on a large and
attractive pipeline. Through this pipeline we expect to deliver a growing and
fully covered dividend, which should help to close the remaining discount to
NAV.
We have made good progress this year and are pleased to see SUPR's share price
appreciating 16% in the calendar year to date alongside the discount to NTA
narrowing. We have positioned the business for the next exciting phase of
growth as we look to deliver greater scale, liquidity and ultimately dividend
growth which more closely matches our rental uplifts.
OUR PORTFOLIO
The portfolio benefits from long unexpired lease terms with predominantly
upwards only, index linked leases, helping to provide long-term income with
contractual rental growth.
Within the UK, operators typically look at the affordability of rent based on
a benchmark of c.4% rent to turnover, simply seen as two weeks of trade. The
Group's UK supermarkets average rent to turnover is 4%, which equates to £23
per sq.ft. We have highly secure income with 100% rent collection during the
year(25), with Tesco and Sainsbury's accounting for 71% of the Group's rent
roll.
The Group's Carrefour stores are subject to annual, uncapped inflation-linked
rent reviews and are let on low and affordable rents of €8 per sq.ft. with
an average rent to turnover of 2.0%. The rents produce a low capital value of
€109 per sq.ft.
As part of the Company's investment strategy to acquire high-quality, strong
trading supermarkets, the Company sometimes acquires complementary non-grocery
units that are co-located with a store. These units often create a retail
destination helping to drive further footfall into the supermarket.
Non-grocery assets represent 7% of the Portfolio by value.
During the year, the Company selectively strengthened its wholly owned
("Direct") Portfolio with the addition of 10 supermarkets for a combined total
of £81.2 million(26, 28).
November 2024: A Sainsbury's in Huddersfield, acquired for £49.7 million. The
store has an 11-year unexpired lease term(27) and is subject to annual upwards
only RPI-linked rent reviews.
February 2025: A portfolio of nine Carrefour supermarkets located in France,
acquired for €36.7 million(28). The portfolio was a direct sale and
leaseback with Carrefour with a 12-year unexpired lease terms and subject to
annual, uncapped inflation-linked, rent reviews.
The acquisitions during the year were purchased at an average net initial
yield of 7.3%(29) providing an attractive spread to the Group's incremental
cost of debt and were immediately accretive to earnings. The increased
exposure to index-linked income also generates further contractual earnings
growth underpinned by strong performing investment-grade tenants.
The acquisitions during the year were financed using existing headroom within
unsecured debt facilities and through the €39 million private placement
which was announced in February 2025.
For more information on financing arrangements refer to note 22 of the
financial information.
Tenant Exposure by Exposure by
rent roll Valuation
Tesco 41% 43%
Sainsbury's 30% 32%
Carrefour 6% 6%
Morrisons 5% 4%
Waitrose 5% 5%
Asda 2% 2%
Aldi 1% 1%
M&S 1% 1%
Non-food 9% 7%
Total 100% 100%(4)
The Portfolio's weighting towards investment grade tenants provides secure
long-term income with a weighted average unexpired lease term of 11 years. In
addition, the portfolio is heavily weighted towards upwards only
inflation-linked rent reviews, providing contractual rental growth. The
average cap on our UK inflation-linked leases' rental uplifts is 4%, while our
French leases are uncapped.
The Portfolio's weighting towards inflation-linked rent reviews is 77% with
56% of the Portfolio being reviewed annually (including post balance sheet
acquisitions).
Indexation Income mix by
rent review type
RPI 64%
CPI 7%
ILC 6%
Fixed 2%
OMV 21%
Total 100%
*Including post balance sheet events
Rent review Income mix by
rent review type
Annual 56%
5 yearly 43%
7 yearly 1%
Total 100%
*Including post balance sheet events
UK rental caps % of UK supermarket index-linked portfolio
0-1 % 0%
1-2 % 1%
2-3 % 15%
3-4 % 67%
4-5 % 17%
Total 100%
The rent profile of the Portfolio is broadly in line with the affordable
market benchmark at 4% Rent to Turnover ("RTO"). The rental maturity profile
is well dispersed with the first material lease expiry in 2032.
WAULT Supermarket WAULT Supermarket WAULT rental breakdown Supermarket WAULT count breakdown
breakdown
0-1 yrs 0.2% 0.2 1
1-2 yrs - - 0
2-3 yrs - - 0
3-4 yrs 0.3% 0.3 1
4-5 yrs - - 0
5-6 yrs - - 0
6-7 yrs 4.9% 4.6 4
7-8 yrs 5.4% 5.0 5
8-9 yrs 13.5% 12.7 21
9-10 yrs 10.6% 9.9 14
10+ yrs 65.1% 60.8 34
Total 100.0%(30) 93.5(30) 81(31)
The UK supermarket Portfolio Net Initial Yield ("NIY") has tightened from 5.8%
to 5.7% driven by both the formation of a strategic JV with Blue Owl and the
return of market stability which is placing upwards pressure on valuations.
The sale of the 50% interest in eight short WAULT stores to the JV has
increased the Portfolio Net Reversionary Yield ("NRY") from 5.1% to 5.2%.
Valuation yield metrics for the SUPR portfolio
UK Supermarkets June-24 June-25
NIY 5.8% 5.7%
NRY 5.1% 5.2%
NEY(32) (Direct Portfolio) 5.8% 5.8%
NEY(32) (Joint Venture) - 6.1%
The environmental efficiency of the Company's stores and prospective
acquisitions continues to be a key priority. Improvements in store efficiency
are delivered through the ongoing investment by our grocery tenants into their
respective store estates. A breakdown of the Company's supermarket EPC ratings
can be seen below:
Supermarket EPC
breakdown
EPC rating % of supermarket
portfolio by value
A 5%
B 43%
C 36%
D 16%
Total 100%
*% excludes Scottish, French and non-food units
Active asset management delivering additional value and improving
sustainability of sites
Alongside SUPR's tenants, the Company is looking at ways to increase the
number of Electric Vehicle ("EV") charging points. SUPR has now installed 58
EV charging bays across five sites. Current EV sites include:
· Morrisons, Workington
· Morrisons, Wisbech
· Tesco, Bradley Stoke
· Tesco, Chineham
· Tesco, Beaumont Leys
The Company has two additional sites agreed and in legal negotiation, which
will bring a further 14 EV charging bays to the portfolio.
Opportunities to add complementary discount grocery operators continue to
progress. At Chineham, the existing planning consent was successfully
implemented, and terms have been agreed with a discount grocery retailer for a
new build store. At Bradley Stoke, the development of an additional discount
grocery store on the retail terrace is in final legal negotiations after
successfully achieving planning consent, with delivery targeted in 2026.
At Chineham, Jett's Gyms has completed fit out works on a 7,000 sq ft vacant
unit following the agreement of a new 10-year lease. In addition to this,
Savers and Brockenhurst Estate Agents have taken access of two vacant units on
the scheme widening the offer at site, encouraging further footfall. Greggs
has upsized into a larger unit following strong trading at this location. The
new lettings at Chineham have resulted in £167,000 of additional rental
income. The final remaining vacant units continue to be marketed widely to
secure new occupiers and to continue to add value to the site.
At Bradley Stoke, Loungers Plc is currently fitting out the main unit in the
Town Square on a 15-year lease. This will see a material investment by the
tenant, modernising a central unit and adding a new tenant to the scheme.
At Sainsbury's, Newcastle, other retail developments are being considered, and
negotiations are ongoing with potential tenants for this site.
In anticipation of Homebase's administration, which was announced during the
year, SUPR had been proactively engaging with alternative occupiers for the
two Homebase units in its portfolio. The Company has facilitated an assignment
of Homebase's lease to The Range at Bangor, Northern Ireland, and agreed a new
lease with B&M at Hessle. These new agreements have replaced the existing
rental income, extended the WAULT and added operators with stronger covenant
strength to the portfolio, increasing value. The Range assignment was
completed within four months of the administration (albeit there was no void
during this intervening period) and B&M new letting was completed within
nine months, this included achieving a revised planning consent to allow a
widening of the user class from DIY store.
Portfolio valuation
Cushman & Wakefield valued the Direct Portfolio as at 30 June 2025, and
the properties in the JV were independently valued by Jones Lang LaSalle.
These valuations are in accordance with the RICS Valuation - Global Standards
which incorporate the International Valuation Standards and the RICS UK
Valuation Standards edition current at the valuation date.
The Direct Portfolio was valued at a total market value of £1,423
million(33). During the year the Company disposed of Tesco, Newmarket for
£63.5 million (7% above book value) and eight stores into a newly formed JV
with Blue Owl for a total consideration £403.3 million (3% above 31 December
2024 book value).
The Joint Venture properties were valued at a £404.7 million, resulting in a
combined Portfolio value of £1,625 million(34), reflecting a like-for-like
valuation increase across the Company's Portfolio of 1.9%(35) vs MSCI All
Property Capital Index during the same period which was up 1.5%.
The valuation increase has been primarily driven by our contractual rental
reviews, with 77% linked to inflation and 2% on a fixed basis and the capital
appreciation achieved on the three Tesco regears. The average annualised
increase from rent reviews performed during the year was 3.4%.
SUPR Investment Case
Defensive sector, resilient through economic cycles
· The UK grocery market has repeatedly demonstrated its defensive
characteristics over the last few years, with exceptional resilience during
macroeconomic shocks, including the pandemic and recent inflationary cycles
· With consistent footfall and non-discretionary consumer spending,
grocery tenants have seen robust performance, supporting sustainable rental
growth across the portfolio
UK grocery market expected to grow from £259 billion to £296 billion by
2029(36)
Highly secure and excellent visibility of income
· Long-dated lease structure with an 11-year WAULT
· 100% occupancy and 100% rent received since IPO(37)
· 77% of rental income is inflation-linked, providing stable,
predictable income
· Let to leading operators in the UK and France
11-year WAULT
Cost efficient platform
· EPRA cost ratio is one of the lowest in the sector with costs
continuing to be tightly controlled, with a target EPRA cost ratio of under 9%
· Significant cost reductions expected in FY26 to offset the
increased cost of finance, meaning the business is now well positioned for
growth in a higher interest rate environment
13.0% EPRA cost ratio
Mission critical and future proofed omnichannel stores acting as last mile
fulfilment hubs
· The Company is dedicated to investing in grocery properties that
are an essential part of national food infrastructure
· Managing a leading portfolio of handpicked, high-quality
supermarkets, with a focus on omnichannel stores fulfilling both online and in
person sales
· Stores are mission critical to our tenants' operational businesses
93% Omnichannel supermarkets(38)
Growing store revenues provide sustainable rental growth
· SUPR's key UK tenants, Tesco and Sainsbury's, continue to perform
well with grocery sales up 4.9%(39) and 4.5%(40) in 2025 respectively
· This increase in sales has been primarily driven by strong
performance across the existing store estate, rather than through the addition
of new stores, supporting sustainable rental growth
Tesco regear rents set 35% above MSCI benchmark index
THE UK GROCERY MARKET
The UK grocery market has continued its strong performance with the Institute
of Grocery Distribution ("IGD") forecasting grocery sales reaching £259
billion this year. This trend is expected to continue in the coming years,
with total grocery market sales forecast to grow to £296 billion by 2029. The
non-discretionary nature of grocery retail means it remains a highly defensive
sector and is well-positioned to maintain growth momentum through 2025 and
beyond.
IGD: UK Grocery Market Value 2024 to 2029 (forecast)(41)
Figure 1
Operators have largely been able to pass on cost rises from changes to
National Insurance and the Minimum Wage to consumers, with UK grocery market
sales growing by 5.4% in the four weeks to 13 July 2025 compared with last
year, above the 5.2% rise in UK inflation in July(42). This dynamic
underscores one of the key advantages of investing in this non-discretionary
spend sector: demand remains resilient, enabling operators to preserve their
margins over the long term. As a result, the sector remains well-positioned to
navigate inflationary environments without significant erosion of
profitability. This supports affordable rental levels, even in a challenging
macroeconomic environment.
UK Grocery Sales Growth vs Grocery Inflation(43)
Supermarkets remain the dominant sales channel
Over the last five years, the supermarket channel has remained the dominant
sales channel in the UK grocery market. Online grocery continues to be a key
pillar of the market and one of the fastest growing channels, accounting for
12% of the total market, demonstrating a permanent shift in consumer
behaviours following the pandemic. Omnichannel stores remain mission critical
for the fulfilment of online sales due to their proximity to customers,
existing supply chain infrastructure and the full product ranges that these
stores carry to maximise product availability for online orders.
IGD: UK grocery market sales by channel (£bn)(44)
While sales growth from the discounters Aldi and Lidl over the last five years
has attracted attention, this is primarily driven by new store openings. As
illustrated below, when adjusting for store footprint, discounter sales growth
trails behind that of full product range supermarkets, with sales per square
foot for the discounters rising by only 5%, compared to 12% for the full
product range supermarkets from 2022 to 2025.
IGD: Increase in sales per square foot by channel (2022-2025)(45)
In contrast, sales growth in the larger format stores is being generated from
existing store estates, rather than new store openings. Large format
omnichannel stores, require multi-acre sites, close to densely populated
areas, with good transport links. A lack of available space, strict planning
regulations and increased construction costs provide significant barriers to
entry for developing new store space. The positive impact of increased sales
being fulfilled through existing supermarket sites should result in improved
sales densities and enhanced store-level profitability. From a landlord's
perspective, this should deliver increasingly affordable rental levels for
tenants and a strong foundation for potential rent increases in the future.
Continued strong performance from SUPR's key tenants
Over the past year, the Company's key tenants Tesco and Sainsbury's have
continued to be the leading operators in the UK grocery market. As seen in the
table below, Tesco achieved the largest increase in market share, driven by
its continued investment in stores, product ranges and loyalty schemes. Tesco
operates c.400 omnichannel stores in the UK and continues to invest further in
its capabilities, recently widening its delivery window for same day orders.
Tesco's weekly online orders increased by 10.8% in 2024/25 and basket sizes by
3.6% year on year ("YoY"). The combined impact saw Tesco's online sales
increase by 10.2% YoY(46).
Sainsbury's reported 4.6% volume growth versus market over a two-year
period(47) reflecting a rebound in consumer demand following a prolonged
period of cost-of-living pressure. Efforts to expand its own label offering
and deepen customer engagement with its loyalty programme have helped
Sainsbury's capture greater market share, while also positioning the brand for
sustained growth in a competitive market.
Together, Tesco and Sainsbury's, continue to anchor the UK grocery sector,
reinforcing the defensive nature of the asset class and supporting long-term
income visibility for the Company.
Operator Market share (as at June 2025)(48) % Market share change (12 months to June 2025)(49) Exposure by valuation Total number of stores (2024)(50) New stores (not incl. convenience)(50)
Tesco 28.2% +0.5% 43% 3,993 2
Sainsbury's 15.2% +0.1% 32% 1,454 2
Asda 12.1% - 0.8% 2% 1,072 2
Aldi 10.8% +0.1% 1% 1,042 21
Morrisons 8.4% -0.3% 4% 1,507 1
Lidl 8.1% +0.4% - 1,026 24
Waitrose 4.5% +0.1% 5% 346 0
Turning point for Asda and Morrisons
Following the private equity takeovers of Asda and Morrisons, both operators
struggled to maintain market share as increased debt costs and senior
management turnover disrupted operations and hampered price competitiveness.
Morrisons reacted more quickly focusing on price through initiatives such as
the More Card loyalty scheme, launched in May 2023. The initiative reached 5.6
million active users by June 2024 and by January 2025, it was used in 76% of
Morrisons' transactions, successfully driving customer engagement(52).
Morrisons has also refocused its online presence; the operator will gradually
phase out its use of the Erith centralised customer fulfilment centre ("CFC")
and integrate Ocado's AI technology to fulfil more orders directly from its
existing store estate. This has enhanced customer engagement, streamlined
operations and has positioned the business for more cost-effective growth in a
competitive grocery market. Morrisons has reported improved trading in 2025,
with second quarter like-for-like sales up 3.9% and total sales rising 4.2% to
£3.9bn(53).
Asda experienced a larger decline in market share, falling from 14.3% in
November 2022 to 12.1% in June 2025. However, 2024 saw the return of former
CEO, Allan Leighton as Executive Chairman, who has refocused the operator on
value, with the Rollback campaign successfully lowering prices by an average
of 22% across 50% of its products. This is proving successful. Asda has won
the Grocer 33 Price Award for the lowest-cost major supermarket 18 weeks out
of the 32 between January and August 2025 and has been identified as the
cheapest supermarket by Which? in the six months between January and July
2025. The operator is yet to see an increase in market share, however it
reported its fourth consecutive quarter of improved like-for-like sales for
the period ending 30 June 2025, representing an improving trend in sales
performance.
This indicates a turning point for Asda and Morrisons' performance with both
operators stabilised and positioned for growth.
THE FRENCH GROCERY MARKET
IGD: Grocery market sales (2024 actual, 2025-2029 forecasted)
The French grocery market has showed consistent and prolonged growth, with
total sales forecast to reach €329 billion in 2029, representing 3% annual
growth. The market is highly consolidated with over 60% of market share
controlled by three operators E.Leclerc, Carrefour and Intermarche. Over the
last 12 months, Carrefour has increased its market share from 19.3% to 21.5%
primarily driven by the strategic acquisitions of the grocery operators, Cora
and Match. This brings it much closer to the market leader, E.Leclerc, which
has a 24% market share.
Additionally, Carrefour has recently launched a €1.2 billion cost-saving
initiative which will contribute towards price investment initiatives such as
'Le Club Carrefour' which was announced in 2025 and delivered its first wave
of price cuts in March, earlier this year.
Online Grocery Market Sales (2024 actual, 2025-2029 forecasted)(54)
Similar to the UK, the pandemic has permanently enlarged the French online
grocery market with the channel experiencing 88% growth between 2018 and 2025;
a further 21% growth is expected by 2029 making it the fastest growing channel
in the grocery market. Due to lower population density the primary online
model in France is Click & Collect, accounting for 80% of all online
orders; by comparison Click & Collect represents 20% of the UK online
grocery market. Online fulfilment in France is also dependent on omnichannel
stores, with baskets picked in store and the majority of customers travelling
to a site to receive orders. As part of its 2026 strategic objectives,
Carrefour Group has highlighted the importance of omnichannel to its strategy.
Carrefour's objective is for omnichannel customers to represent 30% of all its
customers by 2026 as omnichannel shoppers spend more on average and have a
higher retention rate than customers from stores alone(55).
Investment market
Since IPO, transaction volumes have remained broadly flat with a long-term
average of £1.7 billion per year(56). However, during the year UK supermarket
volumes have been constrained (at £1.0 billion) reflecting a shortage of
available stock and a preference for potential sellers to hold supermarket
assets as they provide stable inflation-linked cashflow backed by strong
tenants. The constrained supply and greater visibility on future cost of
capital is expected to place upwards pressure on valuations.
This year, there has been a return of a broad range of market participants
bidding for supermarkets assets. Active buyers in the market include Royal
London Asset Management, ICG, Local Government Pension Schemes, and French
property funds (SCPI's). A key driver of the increased demand is the appeal of
long term, inflation linked earnings in a higher interest rate environment.
The secure earnings derived from these mission critical assets offer a
compelling safe haven asset for investors seeking stable, predictable and
growing income against the current macroeconomic backdrop.
Supermarket property valuations are showing signs of stabilisation, and a
gradual recovery from the 2023/24 levels, supported by competitive bidding and
new sources of capital entering the market.
This presents an attractive entry point in the cycle. SUPR has demonstrated
its ability to sell assets above book value and redeploy capital at wider
yields, leveraging the team's deep asset selection expertise. As a sector
specialist, SUPR continues to identify earnings-accretive opportunities that
support scale while maintaining capital discipline.
Further supporting this growth trajectory is SUPR's debut sterling bond
issuance in July 2025, fixed at a 5.125% coupon. This issuance will help
extend the maturity profile of SUPR's debt and provide a stable foundation for
continued expansion.
FINANCIAL OVERVIEW
Summarised Financial results
Year Ended Year Ended
30 June 2025 30 June 2024
£'000 £'000
Net rental income 113,234 107,232
Management fees 305 -
Net income 113,539 107,232
Administrative expenses (14,469) (15,218)
Net finance costs (26,985) (16,262)
Share of joint venture income 1,072 -
Exceptional items(1) 1,062 70
EPRA earnings(2) 74,219 75,822
Valuation surplus/(deficit)(3) 28,469 (65,825)
Loss on disposal of investment properties (1,327) -
Changes in fair value of interest rate derivatives (18,842) (31,251)
Termination fee(4) (20,800) -
Exceptional items(1) (1,062) (70)
IFRS profit/(loss) before tax 60,657 (21,324)
1. Adjusted to exclude exceptional items relating to legal
fees incurred in relation to the management internalisation (£0.6 million),
JSE listing fees (£0.2 million), and non-cash accelerated loan arrangement
fees (£0.3 million)
2. *The Company previously included an additional earnings
measure called "Adjusted earnings" and "Adjusted EPS". The metric adjusted
EPRA earnings by deducting one-off items such as debt restructuring costs.
3. Change in fair value of investment properties including
joint venture assets at share
4. The termination fee includes; £19.7 million termination of
investment advisory agreement, an additional £0.3 million for the termination
of the AIFM agreement and a further £0.8 million for the provision of
transitionary services.
Net rental income
The portfolio generated net rental income of £113.2 million for the year
ended 30 June 2025, compared with £107.2 million in the prior year. This
represents an increase of £6.0 million or 5.6%, driven by the positive net
impact of like-for-like rental growth and income from acquisitions, partially
offset by the impact of property disposals.
On a like-for-like basis, EPRA net rental income increased by 2.4% (30 June
2024: 2.1%). During the year, 45 rent reviews were successfully completed,
generating £3.1 million of additional rental income, equating to a 4.1%
uplift (or 3.4% on an annualised basis).
Direct property expenditure remained broadly stable at £0.8 million (30 June
2024: £0.6 million). The portfolio continues to deliver a gross to net margin
of 99.3% (30 June 2024: 99.4%), which remains among the highest in the sector.
This reflects the strength of our single-let strategy and the high covenant
quality of our tenant base.
Rent collection remained robust, with 99.7% of rent collected for the year
(30 June 2024: 99.9%). During the year, Homebase entered administration,
however, both impacted assets have been successfully relet to tenants with
significantly stronger covenants, enhancing the quality of income.
As at 30 June 2025, the portfolio maintained a low EPRA vacancy rate of 0.3%,
underscoring the high quality of our portfolio and proactive asset management.
Administrative expenses and EPRA cost ratio
Administrative expenses have reduced by 5% to £14.5 million, reflecting the
operational efficiencies gained following the Internalisation in March 2025.
Driven by these cost efficiencies achieved through the Internalisation, our
EPRA cost ratio improved by 170 basis points, reducing to 13.0% for the year.
We anticipate further savings in the financial year ending 30 June 2026 and
remain focused on achieving an EPRA cost ratio below 9%, consistent with our
commitment to disciplined cost management and operational optimisation.
30 June 30 June
2025 2024
EPRA cost ratio including direct vacancy costs 13.0% 14.7%
EPRA cost ratio excluding direct vacancy costs 12.4% 14.4%
Net finance costs
Net finance costs increased by £10.7 million to £27.0 million, primarily
driven by a £113.6 million rise in the average drawn debt balance compared to
the prior year, alongside an increase in the weighted average cost of debt.
In May 2025 we received £200.4 million net proceeds from the completion of
the strategic JV with Blue Owl. In the near term, we have used these proceeds
to pay down existing debt drawn under revolving credit facilities and the
purchase of the Tesco store in Ashford after the year end.
EPRA earnings
The Company delivered EPRA earnings of £74.2 million for the year ended 30
June 2025, compared to £75.8 million in the prior year. EPRA earnings per
share were 6.0 pence, down slightly from 6.1 pence in 2024, representing a 2%
decrease.
EPRA earnings are a key measure of the Company's underlying operating
performance, and therefore, excludes non-recurring items. The marginal decline
in earnings per share reflects temporary cash drag as the Company continues to
redeploy net proceeds from its recently completed JV.
The Board remains confident in the Company's strategic direction and its
ability to generate sustainable long-term value.
A full reconciliation between IFRS and EPRA earnings can be found in note 12
of the Financial Statements.
EPRA net tangible assets and IFRS net asset
As at As at
Proportionally consolidated basis 30 June 2025 30 June 2024
£'000 £'000
Investment properties 1,618,169 1,768,216
Fair value of financial asset held at amortised cost 7,280 7,530
Total portfolio value 1,625,449 1,775,746
Bank borrowings (603,602) (694,168)
Cash 100,937 38,691
Other net liabilities (34,711) (35,737)
EPRA net tangible assets 1,088,073 1,084,532
Fair value of interest rate derivatives 11,224 31,449
Fair value adjustment for financial assets held at amortised cost 3,955 3,493
IFRS net assets 1,103,252 1,119,474
Pence
Movement in EPRA NTA per share
EPRA NTA per share at 30 June 2024 87.0
EPRA earnings 6.0
Dividends paid (6.1)
Realised and unrealised gains 2.2
Management internalisation (1.7)
Other (0.3)
EPRA NTA per share as at 30 June 2025 87.1
EPRA net tangible assets ("EPRA NTA") is considered to be the most relevant
measure for the Group and includes both income and capital returns but
excludes fair value of interest rate derivatives and includes revaluation to
fair value of investment properties held at amortised cost.
At 30 June 2025, EPRA NTA was £1,088 million (30 June 2024: £1,085 million),
representing an EPRA NTA per share of 87.1 pence, an increase of 0.3% since 30
June 2024, with realised and unrealised gains from our investment property
portfolio being mostly offset by the one-off termination payment in respect of
the Internalisation.
Including dividends paid in the year, our Total Accounting Return ("TAR") was
7.2% compared with 0.3% in the prior year.
Portfolio Valuation
Our Portfolio, which includes share of joint ventures and the fair value of
financial assets held at amortised cost, was valued at £1.6 billion as set
out below:
Movement in portfolio valuation £'000
Group opening property portfolio valuation 1,768,216
Property additions 81,753
Disposals (466,825)
Capital expenditure 365
Revaluation movement 30,730
Foreign exchange movement 1,580
Group closing property portfolio valuation 1,415,819
Fair value of financial assets held at amortised cost 7,280
Share of joint venture 202,350
Total property portfolio value 1,625,449
During the year, the Group continued to actively manage its portfolio through
selective acquisitions and disposals aligned with its strategic objectives.
The Group acquired a Sainsbury's omnichannel supermarket in Huddersfield for a
total consideration of £49.7 million, excluding acquisition costs. In
addition, the Group expanded its footprint in France with the acquisition of a
portfolio of nine Carrefour omnichannel supermarkets(24) for €36.7
million(28), also excluding acquisition costs.
The Group disposed of a Tesco supermarket in Newmarket for £63.5 million,
representing a 7% premium to book value. Furthermore, eight supermarket assets
were transferred into the Group's strategic JV, at a value of £403 million,
achieving a 3% premium to book value.
Valuation yields remained broadly stable throughout the year. The Group
recorded a revaluation gain of £30.7 million, equivalent to a 1.9% increase,
primarily driven by contracted rental uplifts and the capital appreciation
achieved on the three Tesco regears.
Net Debt, Leverage and Financing
Adjusted net debt is a proportionally consolidated measure, which includes the
Group's share of joint ventures, and is represented as bank borrowings, less
cash and cash equivalents.
£m
Movement in adjusted net debt
Adjusted net debt at 30 June 2024 655
EPRA earnings (73)
Dividends paid 74
Acquisitions 82
Disposals (263)
Internalisation 21
Other 7
Adjusted net debt at 30 June 2025 503
The Group's adjusted net debt reduced by £152 million during the year,
closing at £503 million (30 June 2024: £655 million). This reduction was
primarily driven by net proceeds received from the disposal of eight
supermarket assets into the Group's strategic JV with Blue Owl.
These proceeds were initially utilised to repay amounts drawn under existing
revolving credit facilities, resulting in a significant improvement in the
Group's leverage metrics. At year-end, the net debt to EBITDA ratio stood at
5.1x, down from 7.1x in the prior year. On a weighted average basis, the ratio
was 7.4x for the year.
The Group expects adjusted net debt to increase over the course of the next
financial year, as the net proceeds from the JV are redeployed into the
Group's attractive pipeline of investment opportunities. Accordingly, the net
debt to EBITDA ratio is anticipated to rise and is expected to operate within
a medium-term target range of 7.0x to 8.0x.
Financing
30 Jun 2025 30 Jun 2024
Undrawn facilities(1) £350m £54m
Loan to value 31% 37%
Net debt / EBITDA ratio (period-end) 5.1x 7.1x
Weighted average cost of debt (at period end) 4.2% 3.5%
Interest cover 3.8x 6.2x
Average debt maturity(1) 3.9 years 2.0 years
% of drawn debt which is fixed/hedged(1) 100% 90%
1. Figures presented for 30 June 2025, include post period end
transactions and are therefore stated as at the date of these report and
accounts.
The Group continued to actively manage its debt structure during the year,
executing a series of strategic financing transactions across a range of
markets. These actions were aimed at optimising the Group's capital structure
and further strengthening its financial position.
Including post period end activity, the Group has raised £652 million of new
debt (including share of joint venture) and repaid £322 million of near-term
facilities:
- In July 2024, the Group completed its first private placement debt
issuance with a group of institutional investors. The €83 million senior
unsecured notes have a maturity of seven years and a fixed rate coupon of
4.44%.
- In July 2024, the Group refinanced its £97 million secured debt
facility with Deka through a new £100 million unsecured facility with ING
Bank N.V., London Branch. The interest only facility has a maturity of three
years and is priced at a margin of 1.55% over SONIA.
- In February 2025, the Group completed a €39 million private
placement with a seven-year maturity and a fixed rate coupon of 4.10%.
- In April 2025 the Group signed a £90 million unsecured bi-lateral
term loan facility with Barclays. The net proceeds were used to refinance the
Company's existing secured debt facilities with Wells Fargo and Bayerische
Landesbank of £30 million and £55.4 million respectively. The facility has a
three-year term and is priced at a margin of 1.55% above SONIA and hedged with
a cap of 3.45% against SONIA.
- In June 2025, the Group signed a new £215 million secured term loan
facility for its JV with Blue Owl, through a bank syndicate comprising
Barclays, HSBC, ING and SMBC. The facility is priced at 1.50% above SONIA and
has been hedged via interest rate swaps, fixing the interest at 5.10% for the
three-year term (excluding fees). It was undrawn as at 30 June 2025.
Post year end
- In July 2025, the Group completed a debut £250 million Sterling
bond issuance, with a six-year term and a coupon of 5.125%, 115 basis points
over Gilts.
As a result of these transactions, the weighted average debt maturity profile
of the Group has improved significantly, increasing by 1.9 years to 3.9 years
(at the date of this report). The Group has c.£450 million of undrawn
facilities and available cash, which we expect to utilise for deployment into
the Group's attractive pipeline of investment opportunities.
The Group's interest rate risk is mitigated through a combination of fixed
debt and derivative interest rate swaps and caps. 100% of the Group's drawn
debt is fixed or hedged, and further to the £250 million bond issuance, we
intend to use the value of existing interest rate derivatives to hedge the
Group's overall interest rate exposure to c.4.7%, once the JV proceeds have
been redeployed.
The Group maintains good long-term relationships with all lenders and is
currently in discussions regarding the refinancing requirements over the next
financial year.
The Group continues to monitor its banking covenants and maintains significant
headroom on its LTV and ICR covenants. As at 30 June 2025, property values
would need to fall by around 40% before breaching the gearing covenant.
Similarly, net operating income would need to fall by 54% before breaching the
interest cover covenant.
Fitch Ratings, as part of its annual review, reaffirmed the Group's BBB+
rating with a stable outlook.
Financial Summary
The financial year has been transformative for the Company, marked by the
successful execution of strategic initiatives aimed at enhancing operational
efficiency and strengthening the balance sheet. These initiatives have already
delivered cost efficiencies, and the Company expects further savings in the
financial year ending 30 June 2026, with a continued focus on achieving an
EPRA cost ratio below 9%.
In addition, the Company undertook a series of financing transactions, which
have extended the average debt maturity profile, diversified funding sources,
and enhanced liquidity. As a result, the Company is well positioned
to execute on a high-quality pipeline of investment opportunities, supporting
its long-term growth strategy.
TCFD CONSISTENT CLIMATE-RELATED FINANICAL DISCLOSURES STATEMENT 2025
Energy and GHG Emissions Foreword
Recognising the urgent need to address climate change and support the
transition to a net zero economy, the Company is committed to reaching net
zero greenhouse gas ("GHG") emissions across its value chain by 2050.
During the reporting period, the Company reached a further milestone linked to
its net zero commitment, with the publication of its first Climate Transition
Plan ("Transition Plan"). The Transition Plan details how the Company intends
to reduce its emissions in line with the Company's Science Based Targets
initiative ("SBTi") approved emissions reduction targets, building on the
initial decarbonisation analysis conducted when the Company's targets were
first set in 2024.
The publication of the Transition Plan reflects the Company's belief in the
importance of transparent, decision-useful sustainability reporting to improve
our accountability to stakeholders. The Company's SECR and TCFD Report can be
found below on pages 36 to 48. In addition, the Company's GHG independent
limited-assurance report and standalone Sustainability Report, covering its
wider performance against the three pillars of its Sustainability Strategy,
are both available on the Company's website.
The Company remains committed to further progressing its climate-related
strategy and emissions reductions activities, as it continues to make progress
on its Transition Plan and Net Zero commitment.
Streamlined Energy and Carbon Reporting ("SECR")
The below table and supporting narrative summarise the Company's SECR
disclosure, in compliance with the Companies (Directors' Report) and Limited
Liability Partnerships (Energy and Carbon Report) Regulations 2018. Data for
the years FY24 and FY25 is included as this is the Company's third year of
SECR disclosures.
In 2025, the Company successfully completed the internalisation of the
Company's management function. From March 2025 SUPR formally employs staff,
moving away from the external advisory arrangement with Atrato Group. As a
result, emissions from SUPR office consumption (Scope 1 and 2), Waste,
Business Travel and Employee Commuting (Scope 3) are now being calculated as
part of the GHG inventory. This year, emissions from waste generated in
SUPR-controlled communal areas of the Company's assets have also been
accounted for.
An error in the electricity and gas data at Willow Brook Shopping Centre was
found for the previous reporting year (FY24), resulting in missing Scope 1 and
2 emissions reported last year. This has now been rectified and restated
figures are included in the table below. The correction has resulted in a 121%
increase in Scope 1 and 2 emissions and a 0.4% increase in total emissions for
the reporting year FY24. This has not led to a material change in estimations
- see appendix for further detail. Year-on-year comparisons will compare the
current reporting year (FY25) against these corrected values for the previous
reporting year (FY24).
Compared to the previous reporting year (FY24), there has been a decrease in
Scope 1 emissions from 56 tCO(2)e to 18 tCO(2)e (68% reduction) in the current
reporting year due to improved accuracy of data and reduced consumption. In
contrast, there has been an increase in Scope 2 location-based emissions from
172 tCO(2)e to 253 tCO(2)e (47% increase) due to improved accuracy of data and
increased consumption. For seven of the communal areas, the use of renewable
electricity at these sites, evidenced by green electricity certificates, has
resulted in a decrease in total Scope 2 market-based emissions in this
reporting period (see Table C). Due to this overall increase in the Company's
Scope 1 and 2 location-based emissions, emissions from Fuel and Energy related
activities ("FERA") (Scope 3 category 3) have also increased from 66 to 86
tCO(2)e (30% increase) for this reporting year.(57)
Emissions from Purchased Goods and Services (Scope 3 category 1) have
increased from 2,215 to 3,882 tCO(2)e for this reporting year, driven by an
increase in spend. This is likely linked to internalisation process as the
main increase was detected in spend related to legal and financial services.
This year no newly built properties have been added to the portfolio;
therefore, no emissions are attributed to Capital Goods (Scope 3 category
2).
In April 2024, SUPR acquired a portfolio of Carrefour omnichannel supermarkets
in France through a sale and leaseback transaction. This is the first year
these assets have been included in the reporting. Additionally, one UK
supermarket has also been acquired in this reporting year. Even with the
acquisition of this new asset and the inclusion of Carrefour assets, Scope 3
energy consumption and resultant emissions from Downstream Leased Assets
(Scope 3 category 13), which includes tenant Scope 1 and 2 emissions, have
decreased from 81,931 to 59,138 tCO2e (28% decrease). Our calculation of
downstream leased assets emissions includes refrigerant emissions alongside
energy use given the material consumption of refrigerants used in
supermarkets. This goes beyond the minimum boundaries required by the
Greenhouse Gas Protocol. This year's reduction in emissions is primarily
driven by the increased availability of refrigerant data from supermarket
tenants, offering a more accurate representation of refrigerant-related
emissions, but not reflecting an actual decrease in emissions. We will
consider how this newly available data may be used to support more accurate
recalculation of base year emissions in future. A decrease in supermarket
tenant electricity consumption has also reduced absolute Scope 3 category 13
emissions. Overall, total Scope 1, 2 and 3 emissions have decreased from
84,621 tCO(2)e in the previous reporting year to 63,423 tCO(2)e (25%
reduction) in the current reporting year.
Report Previous reporting year: As restated: Current reporting year:
1 July 2023 - 30 June 2024 (FY24) 1 July 2023 - 30 June 2024 (FY24) 1 July 2024 - 30 June 2025
(FY25)
Location UK UK UK
Emissions from the combustion of fuel and operation of facilities (tCO(2)e) 11 56 18
(Scope 1)
Emissions from purchase of electricity (location-based) (tCO(2)e) (Scope 92 172 253
2)
Emissions from business travel in rental cars or employee-owned vehicles where N/A N/A 1
company is responsible for purchasing the fuel (tCO(2)e) (Scope 3)(58)
Total mandatory emissions (tCO(2)e)(59) 103 228 272
Voluntary: Emissions from Fuel and Energy related activity (location-based) 32 66 86
(tCO(2)e) (Scope 3)
Voluntary: Emissions from Purchased Goods and Services (tCO(2)e) (Scope 3) 2,215 2,215 3,882
Voluntary: Emissions from Waste (tCO(2)e) (Scope 3) N/A N/A 42
Voluntary: Emissions from Business Travel (tCO(2)e) (Scope 3)(60) N/A N/A 0.3
Voluntary: Emissions from Employee Commuting (tCO2e) (Scope 3) N/A N/A 2
Voluntary: Emissions from Capital Goods (tCO(2)e) (Scope 3) N/A N/A N/A
Voluntary: Emissions from Downstream Leased Assets (tCO(2)e) (Scope 3)(61) 81,931 82,112 59,138
Total gross emissions reporting (tCO(2)e)(62) 84,281 84,621 63,423
Energy consumption used to calculate Scope 1 emissions (kWh) 56,568 300,607 93,564
Energy consumption used to calculate Scope 2 emissions (kWh) 443,555 830,947 1,219,830
Energy consumption used to calculate Scope 3 emissions (kWh)(63) 174,876,336 178,636,643 179,141,326
Total energy consumption (kWh) 175,376,459 179,768,197 180,454,720
Intensity ratio: tCO(2)e (gross Scope 1 + 2) per m(2) of floor area(64) 0.00037 0.00066 0.00078
Intensity ratio: tCO(2)e (gross Scope 1, 2 + 3) per m(2) of floor area(65) 0. 008345 0.08 0.06
Methodology
The FY25 footprint within the scope of SECR reporting is equivalent to 272
tCO(2)e, for mandatory emissions reporting, and 63,423 tCO(2)e, including
voluntary emissions, with the largest portion being made up of emissions from
downstream leased assets at 59,138 tCO(2)e.
Anthesis (UK) Limited ("Anthesis") has calculated the above GHG emissions to
cover all material sources of emissions for which the Company is responsible.
The methodology used is aligned with the GHG Protocol: A Corporate Accounting
and Reporting Standard (revised edition, 2015). Responsibility for emissions
sources was determined using the operational control approach. All emissions
sources required under The Companies (Directors' Report) and Limited Liability
Partnerships (Energy and Carbon Report) Regulations 2018 are included.
Raw data captured in spreadsheets including energy spend and consumption data
has been collected by the Company. Where actual consumption data was available
for natural gas, electricity and refrigerants, this was used. To address data
gaps, the most appropriate proxy was applied by using either previous year's
data, actual data to calculate average monthly consumption, or by applying the
average floor area intensity from sites with actual data. Average floor area
intensity calculations excluded high-consumption outliers; for example,
estimates for carpark sites were derived solely from other carparks, which are
expected to have comparable energy intensity. Fuel oil was estimated by
applying the average 2024 UK fuel oil price to the budgeted spend for fuel
oil. Fuel oil estimated energy was then converted to GHG emissions using the
UK Government's GHG Conversion Factors for Company Reporting 2024.
Scope 3 emissions have been calculated for relevant material categories using
consumption data, spend data, floor area and EPC data. Fuel and Energy related
activities includes well-to-tank ("WTT") and transmission and distribution
("T&D") upstream emissions from Scope 1&2. For Purchased Goods and
Services, Environmentally Extended Input Output ("EEIO") has been used. Spend
data was provided per supplier and mapped to 2023 DEFRA Input/Output ("IO")
categories. No newly built sites were acquired during this reporting year,
therefore there were no Capital Goods this year.
Where actual data was not available for Downstream Leased Assets, industry
energy consumption benchmarks were used in combination with EPC data on energy
use and heating type. This year, full or partial refrigerant data was provided
for all supermarket tenants. Where refrigerant data was only partially
provided, publicly available air conditioning ("AC") certificates were used to
determine the type and amount of refrigerants. Where this was not available,
other similar sites were used as proxies to estimate refrigerant consumption.
Supermarket refrigeration capacity and non-food air conditioning was estimated
using floor-area intensity data from EPA where actual data was not available.
Refrigerant loss rate for refrigeration appliances was estimated from Direct
Emissions from Use of Refrigeration, Air Conditioning Equipment and Heat Pumps
from DEFRA.
Biogenic carbon emissions from combustion of biomass have been excluded from
the Scope 1, 2 and 3 emissions reporting in the table above as per the GHG
Protocol they must be reported separately. Biogenic CH(4) and N(2)O have been
included in the emissions reporting table. Biomass energy consumption resulted
in 15,848 tonnes of biogenic CO(2) in the 2024-2025 reporting period. kWh
energy consumption associated with biomass is included in the table above.
The Company continued its efforts to improve energy efficiency across
landlord-controlled areas and to support tenant-led energy efficiency measures
in FY25, as discussed in the TCFD Report below and the Company's standalone
Sustainability Report.
Approach to GHG emissions restatements
To improve its GHG reporting, the Company may restate previously reported data
to provide a more accurate representation of previous performance and its
decarbonisation journey, should a significant change or error be identified,
such as:
· Significant changes in company structure and activities
· Methodology changes such as improvements in emissions factors, data
access and calculation methodologies
· Discovery of significant error(s) in previously reported data
The Company will restate the FY23 baseline used for its Scope 1, 2 and 3
emissions reductions targets if any of the changes above result in a change of
5% or more, in line with the requirements of the SBTi. The impact of the
Carrefour portfolio acquisition, along with methodology changes from improved
refrigerant data accuracy, has been assessed against the Company's SBT
baseline. This assessment revealed a change in base year emissions exceeding
5%, prompting the Company to recalculate base year emissions (see Table C).
Taskforce on Climate-Related Financial Disclosures ("TCFD")
Introduction
The Company has complied with the requirements of the Financial Conduct
Authority's ("FCA") UK Listing Rules ("UK LR") 6.6.6.(8) by including its TCFD
Statement for FY25 below.
The Company's statement is consistent with the four core TCFD pillars, in
relation to governance, strategy, risk management and metrics and targets, and
all eleven underlying specific recommended disclosures.(66)
The Company's key progress on its climate strategy and net zero commitments
include an updated climate risk assessment (encompassing the portfolio of
Carrefour assets for the first time), refreshed emissions reduction modelling
and publication of the Company's first standalone Transition Plan in June
2025.
Governance
Describe how the board exercises oversight of climate-related risks and
opportunities:
The Board is responsible for overseeing the Group's risk management framework,
including the consideration of climate-related risks and opportunities
affecting the business, as part of its wider oversight of the Company's
sustainability strategy.
To ensure the effective oversight of climate-related issues and the wider
sustainability strategy of the Company, the Board established its ESG
Committee in May 2022, whose role helps to ensure that sustainability issues,
including climate change, are discussed in sufficient detail and given
appropriate focus at the Board level. The ESG Committee, Chaired by Frances
Davies, meets at least four times a year. See the ESG Committee Report on
pages 82 to 83 for more details on Committee members and how the Committee
operates.
The Board and ESG Committee is primarily informed of climate-related issues by
the Company's Sustainability Consultant through the meetings of the ESG
Committee, at which an ESG Update Paper is presented covering relevant climate
related issues, progress against targets and broader sustainability strategy
updates. The Committee monitors the Company's ESG performance against the KPIs
shown in the Metrics and Targets section of this report. As the Company
contracts the sustainability function to Atrato, the Sustainability Consultant
plays a key role in ESG matters and climate-related issues.
Climate-related issues are also considered by the Board and the Company's
management team in acquisition, development and asset management decision
making. This process is described below under the managing climate-related
risks section of this statement.
The Company's governance structure regarding climate risks and opportunities
is summarised in Figure 1.
Figure 1 | Governance structure related to climate-related risks and
opportunities
Climate and Environment remains one of the three key pillars of the Company's
Sustainability Strategy. The ESG Committee receives a report and verbal update
from the Company's Sustainability Consultant at every quarterly meeting in
relation to this aspect of the strategy, and the other two pillars (namely,
Tenant and Community Engagement and Responsible Business).
The ESG Committee update includes the Company's quarterly performance against
environmental metrics and broader delivery of the Company's sustainability
strategy, including activities such as the roll-out of rooftop solar
photovoltaic ("PV") and EV charging, improvement of Energy Performance
Certificate ("EPC") ratings, ESG-related investor engagement and climate
transition planning. These updates allow the ESG Committee to oversee the
Company's performance against the sustainability strategy. The ESG Committee
is also involved in the review process and ultimate approval of the Company's
TCFD Report.
The Board is committed to ongoing improvement of the Company's climate-related
disclosures. During the reporting year, sustainability consultancy Anthesis
was again engaged to provide external support to help shape the Company's
response and alignment to the TCFD recommendations. As part of this support,
Anthesis provided analysis of, and recommendations on, the Company's final
disclosures to further advance its progress against best practice approaches.
The Board is invested in enhancing the Company's understanding of climate
risks and opportunities and, as part of this, approved budget allocation for
ongoing climate-related activities, for the next reporting year. This
facilitates forward planning and preparation of ESG matters targeted for the
next reporting year.
The Board recognises that appropriate training and upskilling is a key enabler
to ensure successful implementation of the Company's sustainability strategy
and, specifically, the integration of sustainability factors into the
investment process. During the reporting period, the Company's Sustainability
Consultant delivered training to the Company's employees on the topic of
transition planning and the Company's GHG inventory, in order to support the
management of these issues in the Company's activities.
Describe management's role in assessing and managing climate-related risks and
opportunities:
Climate-related risk and opportunity considerations are integrated within
management roles in the investment and asset management decision making
process, ensuring that the potential financial impacts of climate-related
issues are evaluated and addressed.
The Company has an internal ESG Working Group, led by the Company's
Sustainability Consultant. Climate risk and TCFD is a material topic for this
Working Group, and therefore is a standing agenda item at the meetings of the
ESG Working Group to ensure frequent messaging and updates on climate-related
topics, as well as to facilitate and enhance understanding of climate impacts
across teams. Additionally, the Company seeks to ensure climate-related issues
are a standing item when engaging with the Company's tenants. This includes
discussion on topics such as any planned tenant-led investments in store
refurbishments and energy efficiency upgrades, energy consumption data sharing
and improvements to EPC ratings. Such engagement occurs multiple times per
year and more frequently with larger site tenants.
Sustainability Consultant
The Company's Sustainability Consultant is responsible for the day-to-day
delivery of the Company's sustainability strategy, as approved by the Board,
including the assessment, management and reporting of climate-related risks
and opportunities, and leads the provision of climate risk advice to the
Company's Senior Leadership Team. The Sustainability Consultant also has
responsibility for overseeing relevant climate-related targets and the
preparation of the Company's climate-related reporting and co-ordination of
third-party service providers who provide input into this, including
overseeing preparation of the Company's GHG inventory and the independent
limited GHG assurance process.
Internal ESG Working Group
The ESG Working Group, led by the Company's Sustainability Consultant,
consists of the following members: the Company's CEO, Head of Operations and
IR, and Head of Asset Management. The Working Group is responsible for
oversight, monitoring and management of sustainability risks and opportunities
including those related to climate change. This includes the review,
monitoring and management of climate-related risks relevant to current and
future assets in the portfolio. The Sustainability Consultant and Asset
Management aim to meet at least fortnightly to discuss ESG issues impacting
the Company, and climate risk is a standing agenda item as part of these
meetings. The Company's CEO and Head of Operations and IR join on an as needed
basis. Other employees of the Company, including the Investment Director, are
invited on an ad-hoc basis to meetings with climate-related agenda items.
Meeting minutes are circulated to the full Working Group following every
meeting.
Strategy
Describe the climate-related risks and opportunities the organisation has
identified over the short, medium, and long term.
In accordance with TCFD recommended disclosures, the Company has identified
climate-related risks and opportunities across two key categories: (1)
physical risks related to the physical impacts of climate change (acute and
chronic) and (2) transition risks related to the transition to a low carbon
economy (policy, legal, technology, and market).
The Company considers these risks over three key time periods: from 2025 until
2030 (near-term), from 2030 to 2050 (medium-term) and 2050 to 2100
(long-term).
Time Horizon Details
Near-term (until 2030) The near-term time horizon (2025-2030) aligns to both the Company's near-term
Science Based Target (2030) and the anticipated compliance deadline for the
proposed Minimum Energy Efficiency Standards ("MEES") regulation, with 2030
currently the proposed target year for a minimum B EPC ratings. Due to the
12-year weighted average unexpired lease term ("WAULT") of its portfolio, the
Company expects that there will be a limited number of lease renewals and few
changes to its existing leases during this time period.
Medium-term (from 2030 to 2050) The medium-term time horizon (from 2030) aligns with a period of current lease
renewals for the majority of the Company's assets, during which physical and
transition risks associated with the Company's portfolio may have greater
influence on lease agreements with existing and new tenants.
Long-term (2050 to 2100) The long-term time horizon aligns with both the Company's long-term / net-zero
Science Based Target and with a potential increase in the likelihood and
severity of physical climate risks impacting the Company's portfolio. This
allows for the creation of long-term strategies and planning regarding
portfolio management in response to these risks.
Over the last year, the Company carried out an updated transition and physical
climate risk analysis for the entire portfolio, including the Company's French
assets for the first time. Further information on the Company's approach to
Scenario Analysis is available in the Risk Management section of this TCFD
report. For the second year, the Company utilised the MSCI Real Assets (Real
Estate) Climate Risk Tool
(https://www.msci.com/our-solutions/climate-investing/real-estate-climate-solutions)
(the "MSCI tool") and associated Climate Value at Risk ("CVaR") outputs to
support this analysis and quantify the physical risks across the post-2050
(long-term) time horizon.(67)
The Company considered three key temperature scenarios as part of its scenario
analysis conducted this year:
Scenario Details
1.5°C / REMIND / SSP1-2.6 / Orderly ("Net Zero") Net Zero 2050 is an ambitious scenario that limits global warming to 1.5 °C
through stringent climate policies and innovation, reaching net zero CO₂
emissions around 2050.
2°C / REMIND / SSP2-4.5 / "Delayed Transition") A climate scenario that assumes global annual emissions do not decrease until
2030. Strong policies are then needed to limit warming to below 2°C.
3°C / REMIND / SSP5-8.5 / "Current Policies" Current Policies Scenario. No additional climate policies are applied leading
to significant global warming (exceeding 3°C) with severe physical risks and
irreversible impacts like sea-level rise.
These scenarios were chosen following the recommendation of MSCI as being
preferred scenarios for this type of climate analysis and in the absence of an
established real estate industry standard. The Delayed Transition scenario is
a further scenario to the Company's FY24 analysis to incorporate a "middle of
the road" approach in contrast to the more ambitious, but potentially
unachievable 1.5°C scenario (due to insufficient global action). Further
details the data sets used as part of the Company's scenario analysis are
included in the appendix of this TCFD Report.
The outputs provide a quantitative risk assessment using set Financial Risk
Categories determined based on the asset's CVaR, which then supports an
assessment of the portfolio's exposure to climate-related physical risks and
associated value at risk. For each hazard and for the transition risk, the
CVaR is classified into one of seven buckets as shown in Figure 2 below.(68)
Figure 2 | Financial Risk Category
The Company recognises the MSCI tool is only one of many different scenario
analysis tools currently available on the market. Such tools and the
underlying data models and inputs they utilise rely on certain assumptions and
are constantly evolving as climate research and available data sets continue
to advance. This was seen during the reporting period with a change in the
underlying flood model used by the MSCI tool, with MSCI adopting a new third
party flood model (Fathom) to replace its legacy model. Key changes and
strengths with the new Fathom Global Flood Map include:
· The ability to assess three types of flood risk: coastal, fluvial
and pluvial - also known as surface flooding (previously only coastal and
fluvial hazards were available)
· Sophisticated flood protection modelling in which only the
overtopping water causes flooding (based on open-source protection datasets
and manual collection in collaboration with regional stakeholders).
Deeper dive analysis enables enhanced understanding of the impact of
climate-related risk. This year, the Company has chosen to build upon the
physical risk analysis conducted in FY24 in three key ways:
1. FY25 UK Analysis Update: Refreshing the UK flood risk analysis that
was first conducted in FY24 through the updated MSCI tool; and
2. Carrefour Analysis: Expanding coverage of physical risk analysis to the
Carrefour portfolio of assessments, ensuring climate analysis over the
Company's entire portfolio.
3. Ongoing Climate Due-Diligence: Utilising a combination of both the MSCI
tool and UK Government Flood Risk tool to conduct climate-risk reviews for all
assets as part of pre-acquisition due diligence.
FY25 UK Analysis Update
In FY25, the MSCI tool was again used to conduct a physical risk assessment,
identifying the percentage of the Company's UK assets at above negligible
risk.(69) The assessment aimed to refresh the FY24 flood risks findings (which
was identified from the FY24 results as the key physical risk the Company is
exposed to).
The outputs of this assessment under the high emissions 3°C (Current
Policies) temperature scenario (applying a 2050 time horizon and aggressive
outcome)(70) highlighted the following results for the portfolio(71):
· The vast majority (86%) of the Company's UK assets are exposed to
negligible (>0 to 0.5% CVaR) aggregate physical risk overall.
· 93% of the Company's UK assets have either no identifiable or
negligible exposure to coastal flooding risk (vs 89% in FY24)
· 100% of the Company's UK assets have either no identifiable or
negligible exposure to fluvial flooding risk (vs 83% in FY24).(72)
· 95% of the Company's UK assets have either no identifiable or
negligible exposure to pluvial flooding risk (risk not measured in FY24).
· This is in line with the MSCI UK Quarterly Supermarket Benchmark
which also identifies negligible CVaR from coastal and pluvial flooding and no
identifiable fluvial flood CVaR under the same scenario and 2050 time
horizon.
Fluvial and pluvial flood risks reduce significantly under a 2°C (Delayed
Transition) temperature scenario and further reduce under a 1.5°C (Orderly)
temperature scenario (both applying a 2050 time horizon and aggressive
outcome), with 100% of the Company's UK assets having either no identifiable
or negligible exposure. However, coastal flood risk remains the same.
Carrefour Analysis
The same 3°C (Current Policies) (2050 time horizon and aggressive outcome)
temperature scenario was applied to the Company's assets in France and
highlighted the following results(73):
· 96% of the Company's French assets are exposed to negligible (>0
to 0.5% CVaR) aggregate physical risk overall.
· No identifiable coastal flood risk for any of the French assets.
· 100% of the French assets have either no identifiable or negligible
exposure to fluvial flooding risk.
· 96% of the Company's French assets have either no identifiable or
negligible exposure to pluvial flooding risk.
Describe the impact of climate-related risks and opportunities on the
organisation's businesses, strategy, and financial planning.
The Company's material climate-related risks remain the same as identified in
FY24. Table A below provides a description of each risk and the Company's
assessment of potential impact and risk management strategy (including
mitigating actions and resilience factors).
Table A| Climate-related risks summary
TCFD Risk Category Risk Description Time Horizon Potential Impact and Strategy (including mitigating actions)
Transition Risk: Policy and Legal Proposed MEES regulation requiring portfolio assets to achieve a minimum of Near-term (from now until 2030) 1.5°C (Net Zero) scenario: higher risk
EPC B rating by 2030.
2°C (Delayed Transition) scenario: medium risk
3°C (Current Policies) scenario: lower risk
The proposed MEES regulation is expected to require all commercial property to
be a minimum EPC B by 2030. 47% of the Company's portfolio is currently rated
B or above. 74 (#_ftn74)
This risk (and other policy and legal risks) is higher under a 1.5°C scenario
which assumes the implementation of stringent climate policies required to
reach net zero over near-term timeframes.
The direct impact of the proposed regulation is reduced given the Full
Repairing and Insuring ("FRI") nature of the majority of the Company's
leases 75 (#_ftn75) , and the ambitious emissions reduction and associated
energy efficiency targets and commitments of the Company's major tenants.
Tenant-led investment in energy efficiency measures not only reduces energy
consumption but has also led to EPC rating improvements at no cost to the
Company.
As the Company continues to enhance its climate-related engagement with
tenants, it will also look to engage further on tenants' own Transition Plan
and how the Company might collaborate with tenants on the delivery of relevant
transition actions.
Physical Risk: Flooding Impact of acute physical risk of pluvial and coastal flooding. Long-term (2050 to 2100) 1.5°C scenario (Net Zero): lower risk
2°C (Delayed Transition) scenario: medium risk
3°C (Current Policies) scenario: higher risk
The key potential impact of fluvial and coastal flooding is asset damage
(building damage costs). This risk is higher under a 3°C scenario which
assumes no additional climate policies are applied leading to significant
global warming (exceeding 3°C) with severe physical risks including from
sea-level rise, intense rainfall and associated flooding.
The direct impact of flooding risk on the Company is reduced given the
majority of assets are on FRI leases, meaning the tenants have full insurance
obligations. As discussed above, flood risk is also a key risk actively
assessed as part of the Company's acquisition due diligence process.
The Company's focus on investing in strong performing stores and the
long-dated nature of the Company's leases already creates an incentive for the
Company's tenants to build physical climate-resilience considerations into
their own long-term management strategies for the stores they occupy.
In addition to the risks outlined above, in FY23 the Company identified market
shifts to be a prospective opportunity. By accelerating deployment of energy
efficient measures, setting a Science Based Target ("SBT") and better aligning
with tenant preferences, the Company could gain a competitive advantage
relative to other commercial landlords who are not as progressive on in their
climate and sustainability related ambitions. This could enable increased
tenant demand and rent premiums.
During both FY24 and FY25, the Company has acted on this opportunity, first by
setting SBTi approved emissions reduction targets and then by preparing and
publishing its first Transition Plan. In addition, the Company continues to
engage with tenants on the deployment of energy efficiency improvement
opportunities and broader asset-level enhancements such as progressing roll
out of rooftop solar PV and installation of EV across the portfolio. These
measures and the Company's targets in relation to climate-related
opportunities are discussed in more detail under the Metrics and Targets
section of this report, in Tables B and D.
Over the next reporting cycle, the Company plans to further validate the
outputs from the FY25 climate-risk assessment and Carrefour analysis,
including specific review into the assets identified from this assessment as
being exposed (i.e. above negligible in the ratings) to flooding. Through this
ongoing work, where necessary, the Company will determine appropriate
strategic responses to validate asset-level flood risk, for example, the
development of site-specific flood management plans or engagement of further
environmental surveys.
Describe the resilience of the organisation's strategy, taking into
consideration different climate-related scenarios, including a 2°C or lower
scenario.
The Company's scenario analysis outputs from FY25 have highlighted the
following findings:
· Overall, the current portfolio is not highly exposed to physical
risks given the location of the assets.
· Of the physical risks assessed, flood risk (specifically coastal and
pluvial) is the most material risk for the portfolio.
· The impact of climate-related physical risks to the portfolio is
expected to become more relevant in the long term under a high emissions
scenario.
· Risks arising from the transition to a low carbon economy are
expected to be higher in the short term under a 1.5°C scenario, driven by
policy and legal changes, such as potential minimum EPC rating requirements.
Under a 3°C scenario transition risks remain low over the short to
medium-term until the point whereby policy and legal changes (particularly
adaptation measures) are required to address increasing physical impacts.
A benefit of owning mission-critical real estate is that the Company's tenants
make significant investments in maintaining, upgrading and decarbonising the
Company's store estate. These investments are linked to the ambitious net zero
targets and associated energy efficiency commitments of the Company's largest
tenants. Not only do these investments drive improvements in energy
consumption at the store level, they have also helped the Company to see an
improvement in EPC ratings, supporting the Company with progress against its
EPC-related improvement targets. In addition to acting as a transition risk
mitigant, these decarbonisation investments and the long-dated nature of the
Company's leases also create an incentive for the Company's tenants to build
physical climate-resilience considerations into their own long-term management
strategies for the stores they occupy.
Further details on resilience factors are also covered in Table A above.
Risk Management
Describe the organisation's processes for identifying and assessing
climate-related risks.
The Company's approach to risk assessment is as set out in the Our Principal
Risks Section on pages 49 to 51.
The Board has responsibility for the Company's risk management and internal
controls, with the Audit and Risk Committee reviewing the effectiveness of the
Board's risk management processes on its behalf. The ESG Committee is
responsible under the delegated authority of the Board for the monitoring of
climate-related risks (both physical and transition) which are incorporated
into the risk management process.
Pre-acquisition
At the pre-acquisition stage, each potential asset undergoes an ESG due
diligence and climate risk assessment, including preparation of asset-specific
ESG reports that specifically evaluate climate risk. These reports include an
analysis of potential vulnerabilities, such as exposure to flooding and other
climate-related physical risks. The emissions reduction targets of the assets
tenant(s) is also reviewed to assess alignment with the Company's own targets,
as part of each transition review. If climate-related risks are identified in
an acquisition opportunity further due diligence will be undertaken, for
example additional site surveys and analysis, and consideration of any
adaptation measures. The findings from these assessments and any identified
risks are reviewed and discussed by the ESG Working Group. This proactive
approach ensures that the potential impacts on asset value are understood at
the pre-acquisition stage and if the acquisition proceeds, that
climate-related risks are managed and monitored going forward.
A key component of the Company's pre-acquisition due diligence relates to the
energy efficiency of assets: for example, no asset with an EPC below C can be
acquired unless a demonstrable EPC improvement plan is developed, the cost of
which is reflected in the investment case for the asset acquisition.
Opportunities for the installation of energy efficiency and renewable
technology in support of the net zero transition (such as rooftop solar PV and
EV charging) as well as potential biodiversity improvement opportunities are
also considered as part of the investment case.
Post-acquisition
A key aspect of the Company's asset management strategy is sustainability
performance improvement. The Company's Sustainability Consultant and Asset
Management regularly review the operational sustainability performance of the
Company's assets including tracking key environmental performance metrics such
as EPC ratings, percentage of the portfolio with EV charging and rooftop
solar. The Sustainability Consultant oversees the collection of energy
consumption and other ESG data directly from tenants which is a key input into
the Company's GHG Inventory calculations. This enables the tracking of
operational energy performance and YoY emissions against the Company's
emissions reduction targets. The Company's Asset Management team has
responsibility for managing EPC rating assessments for existing assets in the
portfolio, which are conducted on a rolling basis when there are known
sustainable improvements to assets, on expiry or following a change to EPC
calculation methodology.
The Company has committed to an annual review of its climate-related risks,
with the target to annually assess 100% of the existing portfolio of assets
and every new asset at acquisition stage. Existing assets undergo Scenario
Analysis using the MSCI tool to identify climate-related risks and quantify
the prospective financial impact. The Physical Risk model integrated within
the MSCI tool assesses the cost of physical risks on buildings, using climate
data for the given locations of assets incorporating the hazards of extreme
heat, extreme cold, fluvial and coastal flooding, tropical cyclones and
wildfire (see Figure 2). However, given the Full Repairing and Insuring
("FRI") nature of the majority of our leases, the Company has adopted this
method of scenario analysis as an efficient way to review its portfolio while
recognising the limitations of CVaR as a reflection of actual financial risk.
A summary of the key climate data sets integrated into the MSCI Physical Risk
model is included in the appendix of this TCFD Report.
Figure 2 | Physical Risk Hazards:
Describe the organisation's processes for managing climate-related risks.
As part of the acquisition due diligence process, the Company undertakes an
assessment of each asset against a set of sustainability criteria.
Both physical and transition climate risks associated with the Company's
portfolio are assessed and included in the risk register. Materiality and
prioritisation determinations are made through impact, likelihood, and risk
scoring as a part of the risk register. Inherent and residual probabilities
are assigned to each risk, from which a risk score is derived. The
climate-related risks included in the Company's Risk Register are updated to
reflect the findings from the Company's annual climate risk assessment to
ensure that emerging risks and any changes to climate projections or the
Company's portfolio are captured. Mitigating actions are described in detail
in the risk register, laying out governance structure and processes in place
aimed at mitigating each risk. Finally, actions taken to mitigate risks are
tracked and recorded in the register.
In addition, the Company's Sustainability Consultant coordinates internal ESG
Working Group meetings to allow collaborative communication and management of
climate-related risks relevant to current and future assets in the portfolio.
Describe how processes for identifying, assessing, and managing
climate-related risks are integrated into the organisation's overall risk
management.
The Company's approach to risk assessment is as set out in the Our Principal
Risks Section on pages 49 to 51.
The Company manages its risk related to its emissions profile, and associated
regulatory risk, by monitoring, measuring, and disclosing its Scope 1, 2, and
3 GHG emissions, and identifying and progressing available decarbonisation
levers, as outlined in the Company's first Transition Plan, published in June
2025.
Tenant engagement is a core pillar of the Company's Sustainability Strategy
and includes engagement on energy efficiency measures and support of tenants'
own decarbonisation efforts and targets. As part of Scope 3 emissions
initiatives over the last reporting period the Company has undertaken
increased engagement efforts with tenants on collecting energy consumption and
other ESG performance data.
Metrics and Targets
Disclose the metrics used by the organisation to assess climate-related risks
and opportunities in line with its strategy and risk management process.
To better understand and manage its climate-related risks and opportunities in
line with its strategy and risk management process, the Company measures a
number of climate-related metrics, see Table B below.
Table B | Climate-related metrics
Metric category Metric FY23 FY24 FY25
Transition risks % EPCs of supermarkets in England B or above (by valuations)(76) 50% 56% 47%
% EPCs of ancillary units in England B or above (by valuations) 35% 53% 56%
% of actual energy consumption data from supermarket tenants used for GHG 14% 26% 63%
Inventory (vs estimated data)
Physical risks % of supermarket assets in the portfolio screened for physical climate Screening only at acquisition 95%(77) 100%
hazards
Climate-related opportunities % of supermarkets with on-site PV(78) 20% 20% 15%
% of assets with on-site EV charging(79) 20% 30% 40%
Disclose Scope 1, Scope 2, and, if appropriate, Scope 3 GHG emissions, and the
related risks.
The Company has again engaged external consultants, Anthesis, to prepare its
GHG inventory for FY25, covering Scope 1, 2 and 3 emissions. The Company's
full GHG inventory, prepared in line with the GHG Protocol methodology is
disclosed below in Table C (see Appendix A for further details of the
methodology).
Table C | GHG Inventory(80)
FY23 (original) FY23 (recalculated) FY24 (recalculated) FY25
Location-based tCO2e Location-based tCO(2)e Location-based tCO(2)e Location-based tCO(2)e Market-based tCO(2)e Market-based (S1&2 & DLA) tCO(2)e
Scope 1 Total 10.49 10.49 56.11 18.36 18.36 18.36
Scope 2 Total 100.81 100.81 172.13 252.68 76.56 76.56
1: Purchased Goods and Services 3,131.50 3,131.50 2,214.70 3,882.04 3,882.04 3,882.04
2: Capital Goods 463.49 463.49 0 0 0 0
3: Fuel- and Energy-Related Activities 37.46 37.46 65.78 86.41 39.45 39.45
5: Waste Generated in Operations 0 0 0 41.95 41.95 41.16
6: Business Travel 0 0 0 1.55 1.55 1.55
7: Employee Commuting 0 0 0 2.49 2.45 2.45
13: Downstream Leased Assets ("DLA") 72,902.93 57,732.81 72,070.92 50,076.21 50,076.21 40,520.28
Scope 3 Total 76,535.38 61,365.26 74,351.40 54,090.65 54,043.65 44,486.93
Scope 1,2,3 Total 76,646.68 61,476.56 74,579.64 54,361.69 54,138.57 44,581.85
Intensity ratio: tCO(2)e (gross Scope 1 & 2) per m(2) of floor area 0.0003 0.00047 0.0007 0.0008 0.0003 0.0003
Intensity ratio: tCO(2)e (gross Scope 1, 2 & 3) per m(2) of floor area 0.0764 0.09201 0.0743 0.0542 0.0540 0.0444
The Company's scope 1, 2 and 3 emissions total 54,362 tCO(2)e (location-based)
in its FY25 reporting year. Scope 3 accounts for the vast majority of the
Company's emissions at more than 99%, totalling 54,091 tCO(2)e
(location-based). This is to be expected as the Company's Scope 1 and 2
emissions from the communal spaces of its assets is relatively immaterial,
producing 271 tCO(2)e (location-based) collectively. The majority of the
Company's emissions come from their leased properties which sit under Scope 3,
category 13 downstream leased assets.
The Company engaged Grant Thornton UK LLP to provide independent limited
assurance over the Company's GHG emission data disclosed in the SECR table
above, using the assurance standard ISAE 3000 (Revised) and ISAE 3410, for the
year ended 30 June 2025. Grant Thornton has issued an unqualified opinion over
the selected data and the full assurance report is available on the
Sustainability page of the Company's website: Sustainability - Supermarket
Income REIT (https://supermarketincomereit.com/sustainability/) .
Improving the quantity of actual (vs estimated) energy and refrigerant
consumption data, has been a priority for the Company over the reporting
period. As a result, the amount of estimated data has reduced, from 71%
estimated in FY24 to 37% estimated data for this reporting period. The
improved refrigerant data in FY25 has been the key driver of the reduction in
estimated emissions. The majority of the Company's emissions from downstream
leased assets come from assets leased out to supermarkets. Therefore, the
Company has prioritised engagement on data sharing with its supermarket
tenants. As a result of these engagement efforts with supermarket tenants
specifically the following improvements have been made:
· The amount of actual purchased electricity (market based) data in
FY23 was 23%, improving to 52% actual data in FY24 and 61% in FY25.
· The amount of actual natural gas consumption data in FY23 was 27%,
improving to 70% actual data in FY24 and 66% in FY25.
· Actual refrigeration gas data for the first time: 29% vs 0% in
FY24.
This has subsequently improved the overall accuracy of the Company's emissions
disclosures on the prior year. This is a marked improvement from FY22 where
100% of emissions were estimated.
Details of the remaining assumptions and proxies used to complete the
Company's GHG inventory where actual data was not available, are outlined in
the Appendix A.
Describe the targets used by the organisation to manage climate-related risks
and opportunities and performance against targets.
The Company has set ambitious climate-related targets, including both
near-term and long-term/net zero emissions reduction targets, which were
validated and approved by the SBTi in March 2024 see Table D below
Table D | Science Based Targets
Target Description
Near-term The Company commits to reduce scope 1 and scope 2 emissions 42% by 2030 from a
FY23 baseline.
Long-term The Company commits to reduce scope 1, 2 and 3 emissions 90% by 2050 from a
FY23 baseline.
Net Zero The Company commits to reach net-zero by 2050.
Details on how the Company plans to achieve its Science Based Targets can be
found in the Company's standalone Transition Plan. Given the FRI nature of the
majority of the Company's lease arrangements and associated limitations to
site control, the Company has not yet set further specific targets with
regards to the opportunity of on-site solar PV and on-site EV charging
installation. However, the Company continues to actively engage with tenants
on such opportunities and to support installations wherever feasible.
The Company does not currently use carbon offsets and will be prioritising
investment on decarbonisation activities in the near term. In future, the
Company may review their application, including how they could support the
Company's net zero agenda.
The Company will again review its selection of climate-related metrics and
targets over the next reporting period to ensure that it continues to measure
and manage its climate-related risks and evolve its approach to meet best
practice guidance and stakeholder expectations.
FY26 Priorities
Having now prepared and published its first Transition Plan, the Company is
focused on the priority transition activities outlined to ensure continued
progress is made to reduce the Company's GHG emissions in line with its
science-based emissions reductions targets. The Company will continue to focus
on improving its energy consumption and ESG data processes with tenants to
improve the amount of actual (rather than estimated) data utilised in its GHG
emissions calculations. This, in turn, supports more accurate emissions
reduction tracking and enables YoY comparison to help identified priority
sites for EPC assessments.
Going forward, the Company intends to take an iterative approach to scenario
analysis as a strategic planning tool over time, as external tools and
analytical choices evolve and the Company's analysis further matures. The
Company will explore how further changes to its strategy and financial
planning may be required in light of this information year-on-year.
Appendix A: Methodology notes for GHG inventory
Methodology and Assumptions
The 2024 Conversion Factors published by the UK Department for Energy Security
and Net Zero ("DESNZ") was the main source used for emission factors for UK
assets (uplifted from AR5 to AR6). Association for Issuing Bodies ("AIB")
factors has also been used for residual emissions factors. The
Intergovernmental Panel for Climate Change ("IPCC") 2021 factors were used for
refrigerant emission factors. For the electricity consumption of newly
acquired assets, located in France, International Energy Agency ("IEA")
conversion factors have been used. All relevant categories have been included,
and any exclusions are described below.
Scope 1 & 2
For electricity and natural gas, some actual consumption data was provided for
communal areas where energy consumption is controlled by SUPR. Where there
were gaps, estimations were made using the data from previous year or floor
area intensities (based on similar sites within the portfolio, excluding
outliers) as proxies. For fuel oil, spend was used as a proxy due to a lack of
activity data.
Scope 3 (1. Purchased Goods & Services)
This category was estimated using spend as a proxy and applying Department for
Environment, Food & Rural Affairs ("DEFRA") input-output factors
kgCO(2)/GBP) to expenditure.
Scope 3 (5. Waste)
Where data was unavailable, this category estimated waste consumption by using
waste intensity of a similar site that provided actual data.
Water consumption was estimated for all sites without data. Previously, this
estimation was based on the water intensity of one site with data, however
the methodology has been updated to use Real Estate Environmental Benchmark
("REEB") water benchmark intensity in FY25.
Scope 3 (6. Business Travel)
This category was estimated using actual business travel data for SUPR
employees and applying UK Department for Energy Security and Net Zero
("DESNZ") conversion factors.
Scope 3 (7. Employee Commuting)
This category was estimated using employee commuting survey results data for
SUPR employees and applying UK Department for Energy Security and Net Zero
("DESNZ") conversion factors.
Scope 3 (13. Downstream Leased Assets)
The majority of emissions relate to tenant energy use, particularly for
supermarket branches. All supermarket tenants, provided actual consumption
data for electricity, heating and at least partial data on refrigerants. Where
no consumption data was available, estimations were made using benchmark
intensity data based on floor area.
A smaller amount of emissions arises from the communal areas of sites where
the Company owns the land but is not responsible for paying for the energy.
These emissions were estimated using the floor area intensities of similar
sites with actual data.
Note on FERA Emissions:
The GHG Inventory figures have removed FERA emissions that are categorised
under Scope 3 category 13: Downstream Leased Assets ("DLA") to align with the
SBTi minimum boundary alignment. These FERA emissions are associated with the
tenants Scope 1 and 2 emissions that are also categorised under Scope 3 DLA.
The figures reported in the SECR Report above account for a fuller view of DLA
emissions by including FERA emissions under Scope 3 DLA. Therefore, Scope 3
DLA and consequentially, total Scope 3 figures reported in the SECR Report are
higher than figures reported for TCFD due to the exclusion of Scope 3 FERA
under DLA in TCFD.
Appendix B: MSCI Tool
MSCI Physical Risk Model Data Inputs
Hazard Exposure and Financial Impact
Hazard and Type Severity Main Model Input and Data Sources(81) Cost Type Main Vulnerability Models and Data Sources
Coastal Flooding (Acute) Inundation depth (metres) Flood distribution from 1-year to >10,000-year - Fathom's Global Flood Map 3.1 - Asset damage (both) - Asset damage and business interruption functions based on empirical data
event
- Synthesis of observational, reanalysis, and modelled data, with IPCC AR6 sea
- Business interruption (Corporates) or rental income loss (Real Estate)
- Adaptation considered via national (and in some cases, subnational) flood
level rise projections protection measures, based on the open-source, global database of flood
- Elevation model FABDEM+ protection standards FLOPROS and Fathom's in-house database
- Flood protection standards based on FLOPROS and Fathom's in-house database
Fluvial Flooding (Acute) Inundation depth (metres) Flood distribution from 1-year to >10,000-year - Fathom's Global Flood Map 3.1 - Asset damage (both) - Asset damage and business interruption functions based on empirical data
event
- Flow gauge data and river discharge from ISIMIP2b climate models
- Business interruption (Corporates) or rental income loss (Real Estate)
- Adaptation considered via national (and in some cases, subnational) flood
- Elevation model FABDEM+ protection measures, based on the open-source, global database of flood
- Flood protection standards based on FLOPROS and Fathom's in-house database protection standards FLOPROS and Fathom's in-house database
Pluvial Flooding (Acute) Inundation depth (metres) Flood distribution from 1-year to >10,000-year - Fathom's Global Flood Map 3.1 - Asset damage (both) - Asset damage and business interruption functions based on empirical data
event
- Station data and precipitation projections from CMIP6 HighResMIP climate
- Business interruption (Corporates) or rental income loss (Real Estate)
- Considers local variations in drainage system capacity based on the degree
models of urbanization
- Elevation model FABDEM+
- Flood protection based on local degree of urbanization and development
Risk Management and Internal Controls
Risk management framework
The Board recognises that effective risk management is essential to achieving
the Group's strategic objectives and safeguarding stakeholder value. Our risk
management framework ensures that risks are recognised and appropriately
managed.
The Board
· Overall accountability for risk management and internal controls
· Determines risk appetite and reviews principal risks
· Assessing going concern and long-term viability
· Determine matters reserved for the Board
Audit and Risk Committee
· Monitoring principal and emerging risks
· Review the effectiveness of the internal controls
· Report to the Board on the effectiveness of the risk management
framework
Senior Management Team
· Execution of risk management across the business
· Monitoring and managing the specific risks
· Provide updates on current and emerging risks
Approach to risk management
The Board has overall responsibility for the Company's risk management and
internal controls with the Audit and Risk Committee reviewing the
effectiveness of the Board's risk management process on its behalf. The risk
management framework is designed to identify, evaluate, and manage risks in a
manner consistent with the Group's strategic objectives. While they aim to
mitigate risk exposure, they cannot eliminate all risks entirely and therefore
provide reasonable assurance against material misstatement or loss.
The Audit and Risk Committee supports the Board in its oversight of the
Group's risk management and internal control systems. It conducts regular
reviews of the Group's risk register as part of its oversight of risk
management and internal controls. This process enables the Audit and Risk
Committee to provide effective oversight and assurance on the Group's risk
governance.
The Senior Management Team is responsible for the ongoing identification of
risks across the Group's operations and for ensuring that appropriate internal
controls are designed, implemented, and maintained in response to those risks.
These controls are embedded within operational processes and are reviewed
regularly to ensure they remain effective and proportionate.
Risk appetite
The Board determines the level of risk it will accept in achieving its
business objectives. We have no appetite for risk in relation to regulatory
compliance or the health, safety and welfare of our tenants, service providers
and the wider community in which we work. We continue to have a moderate
appetite in relation to activities which drive revenues and increase financial
returns for our shareholders.
Monitoring and Identifying Risk
The Senior Management Team comprises representatives from each business unit,
ensuring that risk management is embedded across all operational areas. The
Senior Management Team meets regularly to review strategic decisions, assess
operational developments, and identify emerging risks.
All identified risks are recorded in the Group's risk register, which is
maintained by the Senior Management Team and reviewed regularly by the Audit
and Risk Committee. This ensures that the register remains current and
reflective of the Group's evolving risk profile.
Emerging risks are a specific focus within the Group's risk management
framework. These are assessed both during scheduled risk reviews and in
response to significant developments. The assessment process includes input
from the Senior Management Team and forms part of the Audit and Risk
Committee's broader oversight responsibilities.
Principal Risks and Uncertainties
The Board has conducted a robust assessment of the principal risks that could
materially impact the Group's business model, performance, solvency, or
liquidity. These risks are reviewed regularly and updated to reflect changes
in understanding and external conditions.
The matrix below outlines each principal risk, assessed by impact and
likelihood. Key changes to the risk profile, along with mitigation measures
and relevant key risk indicators, are detailed in the table on pages 50 to 51.
Key
1 There can be no guarantee that the dividend will grow in line with inflation
2 A significant fall in property values
3 Use of floating rate debt will expose the business to underlying interest rate
movement
4 Major event / business interruption
5 The default of one or more of our grocery tenants
6 Increased competition may impact the Group's ability to source assets
7 Key person risk
8 Cyber security threat
9 Changes in regulatory policy could lead to our assets becoming unlettable
10 We operate as a UK REIT and have a tax-efficient corporate structure. Loss of
REIT status could have adverse tax consequences for UK shareholders
Risk Impact Mitigation Change in Year
1. There can be no guarantee that the dividend will grow in line with The Company has a stated ambition to grow its dividend progressively and aims Focus on reducing costs and targeting a 9% cost ratio
inflation. to providing investors with inflation protection.
We have entered into interest rate swaps and caps to manage our exposure to
Although the Company has received 100% of rent demanded, has increased rents further increases in interest rates.
in line with its contractual rent reviews and has one of the lowest EPRA cost
ratios in the sector, it has been unable to increase its earnings and dividend
in line with inflation.
Interest rates have started to decline from their highs last year which, if
continued, would be supportive of earnings and dividend growth over the long
term beyond expiry of current interest rate hedges.
This has been caused primarily by the cap on rental uplifts in the majority of
the Company's leases and the increase in cost of debt due to higher interest
rates.
We have proactively undertaken a number of measures to grow earnings, such as
accretive acquisitions and cost reduction. Most notably, the Internalisation,
saving approximately £4m per annum.
Increases in interest rates result in higher cost of debt and lower earnings.
In July 2025 we issued our first GBP bond with a coupon of 5.125%. The
issuance will allow the Company to use the value of existing interest rate
derivatives to hedge its overall interest rate exposure to c.4.7%.
We are actively looking at other ways to grow our revenue streams, which will
include the management fee income from the JV.
2. A significant fall in property values. An adverse change in our property valuations may lead to a breach of our The Group targets top performing omnichannel supermarkets, let on long leases,
banking covenants. Market conditions may also reduce the revenues we earn from predominately to institutional grade counterparties, in geographically diverse
our property assets, which affect our ability to pay dividends to locations. The low vacancy (0.3% as of 30 June 25) and strong tenant covenants
shareholders. A severe fall in values may result in us selling assets to repay (80% investment grade) should provide resilience and lessen any negative
our loan commitments, resulting in a fall in our net asset value. impact of a market downturn.
The Group operates a medium term LTV target of 30-40%, which is continually
monitored (at quarterly board meetings and prior to acquisitions). As part of
the Group's going concern and viability assessments, conducted every
six-months, we stress test the resilience of the portfolio to a material
decline in property values. As of 30-June-25, the Group's property values
would need to fall by around 40% before breaching the gearing covenant.
3. Use of floating rate debt will expose the business to underlying Including post balance sheet events, interest on 51% of our debt facilities is Following our £250m bond issuance in July 2025, 49% of the Group's drawn debt
interest rate movement payable based on a margin over SONIA (including JV debt at share). Any adverse is fixed rate via Bond Issuance and Private Placements. We anticipate that
movements in SONIA could significantly impair our profitability and ability to this will reduce as we make acquisitions from our pipeline that is currently
pay dividends to shareholders. in exclusivity.
We will continue to be prudent in managing our floating rate debt in the
current interest rate environment and selectively utilise hedging instruments
and/or fixed rate debt to keep our overall exposure to an acceptable level.
4. Major event / business interruption Unexpected events on a regional, national or global scale that result in a The Company ensures its resilience against global events and business
severe adverse disruption to the Company, which may result in loss of disruption through its financing strategy, diversified portfolio of mission
competitive advantage and adverse impact on financial performance. critical food stores, and a detailed business continuity and disaster recovery
plan. Where appropriate, relevant insurance is procured. Every reporting
period end, the finance team prepare a going concern and viability assessment,
which stress tests the portfolio's resilience to major impacts (large
reduction in asset values and/or loss or rental income).
5. The default of one or more of our grocery tenants would reduce Tenants may default or fail, leading to a reduction in revenue and impacting We target top performing omnichannel stores, let on long-leases to,
revenue and may affect our ability to pay dividends. our ability to deliver a covered and growing dividend predominantly, investment grade covenants. As part of the acquisition due
diligence, store trading data is used to assess performance of the store and
effort rates. As of 30 June 2025, 80% of the portfolio was let to investment
grade covenants.
As part of our ongoing management of the store estate, our asset
management/fund management team will visit every UK store at least once
annually and every French store at least once across a three-year rotation. As
part of this visit, and through discussion with store managers, we will
obtain/estimate current store trading performance.
Any store where trading performance is suffering will be considered for
disposal.
6. Increase competition may impact the Group's ability to source assets The Company faces competition from other property investors. Competitor's may Our team has good experience in the supermarket sector and has strong
in the supermarket sector that meet our return requirements. have greater financial resources than the Company and a greater ability to relationships that help identify opportunities. As sector specialists, and a
borrow funds to acquire properties. leading investor in the supermarket space, we are shown the vast majority of
opportunities that meet our investment criteria.
The supermarket investment market continues to be considered a safe asset
class for investors seeking long-term secure cash flows which is maintaining The Senior Leadership Team has a track record of executing transactions (over
competition for quality assets. This has led to increased demand for £0.5 billion transacted in 2025). We have a resilient capital structure and a
supermarket assets without a comparable increase in supply, which could supportive lender/investor base, and following our bond issuance in July 2025,
potentially increase prices and make it more difficult to deploy capital. we have £350m of liquidity headroom under our debt facilities.
We have a competitive cost of capital and are able to deploy at attractive
rates of return.
7. Key person risk The Company relies heavily on a relatively small team of highly motivated We offer competitive remuneration packages with all staff members New Risk
individuals whose skills and experience are crucial to the success of the participating in the Long-Term Incentive Plan (LTIP), which senior members of
Company. the team are subject to performance conditions. This incentivises long-term
performance and helps to create an ownership culture within the Company. We
conduct semi-annual staff appraisals, which provide a forum to discuss
targets, progress, prospects and training needs.
8. Cyber security threat Cyber threats may give rise to significant financial losses and/or disruption The Company's IT and Cyber Risk Policy is designed to reduce the risk of a New Risk
to business processes and corporate systems. cyber attack against the Company. As part of the ongoing commitment to
improving the security of the Company's data, we have achieved the Cyber
Essentials Plus certification (a UK Government backed certification scheme).
The Company's IT consultant is responsible for conducting periodic cyber
security assessments and also managing the response to identified risk. All
employees are bound by the terms of this policy and receive appropriate
training on a regular basis.
9. Changes in regulatory policy could lead to our assets becoming Changes in regulations (currently represented by Minimum Energy Efficiency The ESG committee stays informed about changes in legislation by working
unlettable. Standards (MEES)) could lead to the possibility of our assets becoming closely with the asset management team and seeks input from specialist ESG
unlettable. Any properties not compliant with MEES could attract reduced experts where necessary.
tenant demand, reduced rental income and/or be subject to fines.
In June 2025, the Company announced its Climate Transition Plan, setting out
our pathway to Net Zero. As part of this plan, we will monitor and track the
energy performance of our buildings, and implement improvements where
identified. Current MEES guidelines require all commercial properties to have
a minimum EPC rating of C as of 1 April 2027 and a B by 1 April 2030. As of 30
June 2025, 84% of the portfolio is has an EPC rating A-C. We will continue to
work with our tenants in achieving our target of all of our UK supermarkets
being rated EPC B or above by 2030.
10. We operate as a UK REIT and have a tax-efficient corporate structure, If the Company fails to remain a REIT for UK tax purposes, our profits and The Board takes direct responsibility for ensuring we adhere to the UK REIT
with advantageous consequences for UK shareholders. gains will be subject to UK corporation tax. regime by monitoring the REIT compliance. The Board has also engaged
third-party tax advisers to help monitor REIT compliance requirements and the
CFO/Head of Finance also monitors compliance by the Company with the REIT
regime.
SECTION 172(1) STATEMENT
The Directors consider that in conducting the business of the Company over the
course of the year ended 30 June 2025, they have acted to promote the
long-term success of the Company for the benefit of shareholders, whilst
having regard to the matters set out in section 172(1)(a-f) of the Companies
Act 2006 (the "Act").
Details of our key stakeholders and how the Board engages with them can be
found on pages 53 to 55. Further details of the Board activities and principal
decisions are set out on page 66 providing insight into how the Board makes
decisions and their link to strategy.
Other disclosures relating to our consideration of the matters set out in
s172(1)(a-f) of the Act have been noted as follows:
s.172 Factor Our approach Relevant disclosures
A. The likely consequences of any decision in the long-term The Board has regard to its wider obligations under Section 172 of the Act. As Key decisions of the Board during the year on page 66.
such strategic discussions involve careful considerations of the longer-term
consequences of any decisions and their implications on shareholders and other Our Key Stakeholder Relationships on pages 53 to 55.
stakeholders and the risk to the longer-term success of the business.
Board Activities during the year on pages 65.
The Board oversees management's execution of strategy to deliver on the
Company's purpose and reviews progress against targets at each Board meeting.
B. The interests of the Company's employees Following the Internalisation of the management function, we gained 14 Our Key Stakeholder Relationships on pages 53 to 55.
employees, including the two Executive Directors, who are critical to the
Company's success. We care about ensuring our employees are motivated, happy
and engaged, and we support their growth through training and career
development opportunities. Our Culture on page 64.
A key focus for the year has been embedding our high-performance culture. The
tone is set by the Board and Senior Management Team who encourage employees to
act with integrity, take ownership and collaborate.
During the year we established our LTIP and granted our first awards, designed
to align the employee's interests with our shareholders.
C. The need to foster the Company's business relationships with suppliers, Our occupiers are important to our business and, with a small team, we work Our Key Stakeholder Relationships on pages 53 to 55.
customers and others closely with our suppliers and advisers to deliver our strategy. We are
committed to building strong relationships with our tenants, suppliers and
advisers, engaging regularly with them.
We treat our suppliers fairly ensuring prompt settlement of their invoices.
D. The impact of the Company's operations on the community and the environment As an owner of assets located in communities across the UK, we aim to ensure Our Key Stakeholder Relationships on pages 53 to 55.
that our buildings and their surroundings provide safe and comfortable
environments for all users.
We are committed to limiting the impact of the business on the environment Details of the ESG policy and strategy are included on pages 82 to 83.
where possible and engage with tenants to seek to improve the ESG credentials
of the properties owned by the Company. The Board's approach to sustainability is also explained in the Company's
first standalone sustainability report available on the Company website.
The Company donated £180,000 to charity in the year, with a focus on
charities that work in the areas in which the Company owns assets and which
align with priority charitable themes including the alleviation of poverty and
hunger, feeding the nation and the ability to positively impact on nature and
biodiversity.
E. The desirability of the Company maintaining a reputation for high standards We are committed to maintaining the highest standards of good governance and Chair's Letter on Corporate Governance on page 59.
of business conduct business conduct.
Our Principal Risks and Uncertainties on pages 49 to 51.
Our culture and values set the standards of employee behaviour and we lead by
example from the Board. Our Culture on page 64.
F. The need to act fairly as between members of the Company The Board, through the Executives, has consistently engaged with shareholders Chair's Letter on Corporate Governance on page 59.
to receive open and constructive feedback.
Our Key Stakeholder Relationships on pages 53 to 55.
The Chair and SID consulted with major shareholders on the Internalisation.
The Remuneration Committee consulted with major shareholders on the
performance measures for the 2025 LTIP award.
GOING CONCERN AND VIABILITY STATEMENT
Going Concern and Viability Statement
The Directors have considered on the appropriateness of adopting the going
concern basis in preparing the Group's and Company's financial statements for
the year ended 30 June 2025. In assessing the going concern basis of
accounting the Directors have had regard to the guidance issued by the
Financial Reporting Council.
Liquidity
At 30 June 2025, the Group had £95.3 million in cash and undrawn committed
facilities totalling £117.0 million with no capital commitments or contingent
liabilities.
After the year end, the Group also increased its direct debt capacity from
£724.0 million to £974.0 million, leaving undrawn committed facilities of
£350.0 million available.
The Directors are of the belief that the Group continues to be well funded
during the going concern period with no concerns over its liquidity.
Refinancing events
At the date of signing the financial statements, the £104.5 million SMBC
facilities fall due for repayment during the going concern period. The Group
has £350.0 million debt capacity which can be utilised to refinance the SMBC
facility in September 2026, whilst there remains the option to extend this
facility.
Covenants
The Group's debt facilities include covenants in respect of LTV, interest
cover, unencumbered assets and priority debt.
The Directors have evaluated a number of scenarios as part of the Group's
going concern assessment and considered the impact of these scenarios on the
Group's continued compliance with debt covenants. The key assumptions that
have been sensitised within these scenarios are falls in rental income and
increases in administrative cost inflation.
As at the date of issuance of this Annual Report 100% of contractual rent for
the period has been collected. The Group benefits from a secure income stream
from its property assets that are let to tenants with excellent covenant
strength under long leases that are subject to predominantly upward only rent
reviews.
The list of scenarios are below and are all on top of the base case model
which includes prudent assumptions on valuations and cost inflation. The Group
is 100% fixed or hedged (including post period end refinancings). No
sensitivity for movements in interest rates have been modelled for the hedged
debt during the going concern assessment period.
Scenario Rental Income Costs
Base case scenario (Scenario 1) 100% contractual rent received when due and rent reviews based on forward In line with Company FY26 budget and increased by inflation thereafter.
looking inflation curve, capped at the contractual rate of the individual
leases.
Scenario 2 Rental income to fall by 20% Costs expected to remain the same as the base case.
Scenario 3 Rental Income expected to remain the same as the base case. 10% increases on base case costs to all administrative expenses
The Group continues to maintain covenant compliance throughout the going
concern assessment period under each of the scenarios modelled. The lowest
amount of ICR headroom experienced in the worst-case stress scenarios was
18.3%. Property values would have to fall by more than 40.5% before LTV
covenants are breached against 30 June 2025 Group valuations.
Having reviewed and considered the scenarios, the Directors consider that the
Group has adequate resources in place for at least 12 months from the date of
these results and have therefore adopted the going concern basis of accounting
in preparing the Annual Report.
Assessment of viability
The period over which the Directors consider it feasible and appropriate to
report on the Group's viability is the five-year period to 30 June 2030. This
period has been selected because it is the period that is used for the Group's
medium-term business plans and individual asset performance forecasts. The
assumptions underpinning these forecast cash flows and covenant compliance
forecasts were sensitised to explore the resilience of the Group to the
potential impact of the Group's significant risks, or a combination of those
risks. The principal risks on pages 49 to 51 summarise those matters that
could prevent the Group from delivering on its strategy. A number of these
principal risks, because of their nature or potential impact, could also
threaten the Group's ability to continue in business in its current form if
they were to occur. The Directors paid particular attention to the risk of a
deterioration in economic outlook which could impact property fundamentals,
including investor and occupier demand which would have a negative impact on
valuations, and give rise to a reduction in the availability of finance.
The sensitivities performed were designed to be severe but plausible; and to
take full account of the availability of mitigating actions that could be
taken to avoid or reduce the impact or occurrence of the underlying risks.
Viability Statement
The Board has assessed the prospects of the Group over the five years from the
balance sheet date to 30 June 2030, which is the period covered by the Group's
medium-term financial projections.
The Board considers the resilience of projected liquidity, as well as
compliance with debt covenants and UK REIT rules, under a range of inflation
and property valuation assumptions.
The principal risks and the key assumptions that were relevant to this
assessment are as follows:
Risk Assumption
Borrowing risk The Group continues to comply with all relevant loan covenants. The Group is
able to refinance all debt falling due within the viability assessment period
on acceptable terms.
Interest Rate Risk The increase in variable interest rates are managed by reduction of variable
debt from cash inflows and utilising interest rate derivatives to limit the
exposure to variable debt.
Liquidity risk The Group continues to generate sufficient cash to cover its costs while
retaining the ability to make distributions.
Tenant risk Tenants (or guarantors where relevant) comply with their rental obligations
over the term of their leases and no key tenant suffers an insolvency event
over the term of the review.
Based on the work performed, the Board has a reasonable expectation that the
Group will be able to continue in business over the five-year period of its
assessment.
Other disclosures
Disclosures in relation to the Company's business model and strategy have been
included within the Strategic Report on pages 1 to 56. Disclosures in relation
to the main industry trends and factors that are likely to affect the future
performance and position of the business have been included within The
Grocery Market on pages 27 to 30. Disclosures in relation to environmental and
social issues have been included within the TCFD Report on pages 36 to 48.
Employee diversity disclosures have not been included as the Directors do not
consider these to be relevant to the Company.
Key Performance Indicators (KPIs)
The KPIs and EPRA performance measures used by the Group in assessing its
strategic progress have been included on pages 31 to 32.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 30 June 2025
Notes Year to Year to
30 June 2025 £'000 30 June 2024
£'000
Gross rental income 4 114,009 107,851
Service charge income 4 9,044 6,822
Service charge expense 5 (9,819) (7,441)
Net Rental Income 113,234 107,232
Administrative and other expenses 6 (14,469) (15,218)
Operating profit before changes in fair value of investment properties, share 98,765 92,014
of income from joint venture and loss on disposals
Changes in fair value of investment properties 14 28,001 (65,825)
Other income 305 -
Termination fee 6,31 (20,800) -
Share of income from joint venture 16 1,540 -
Loss on disposal of investment properties (1,327) -
Operating profit 106,484 26,189
Finance income 10 19,688 23,781
Finance expense 10 (46,673) (40,043)
Changes in fair value of interest rate derivatives 21 (18,842) (31,251)
Profit/(loss) before taxation 60,657 (21,324)
Tax credit for the year 11 871 140
Profit/(loss) for the year 61,528 (21,184)
Items to be reclassified to profit or loss in
subsequent periods
Fair value movements of interest rate derivatives 21 (1,539) (1,765)
Foreign exchange movement (144) 32
Total comprehensive income for the year 59,845 (22,917)
Total comprehensive income for the year attributable 59,845 (22,917)
to ordinary Shareholders
Earnings/(loss) per share - basic and diluted 12 4.9 pence (1.7) pence
The accompanying notes on pages 114 to 145 form an integral part of these
Group Financial Statements.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 30 June 2025
Notes As at
As at 30 June 2024 £'000
30 June 2025 £'000
Non-current assets
Investment properties 14 1,415,819 1,768,216
Investment in joint venture 16 96,556 -
Financial asset at amortised cost 17 11,235 11,023
Interest rate derivatives 21 3,133 15,741
Deferred tax asset 23 1,011 140
Equipment 32 -
Total non-current assets 1,527,786 1,795,120
Current assets
Interest rate derivatives 21 8,091 15,708
Trade and other receivables 18 119,612 11,900
Cash and cash equivalents 95,281 38,691
Total current assets 222,984 66,299
Total assets 1,750,770 1,861,419
Non-current liabilities
Bank borrowings 22 603,602 597,652
Trade and other payables 20 1,672 1,045
Total non-current liabilities 605,274 598,697
Current liabilities
Bank borrowings 22 - 96,516
Deferred rental income 19,601 24,759
Trade and other payables 20 22,643 21,973
Total current liabilities 42,244 143,248
Total liabilities 647,518 741,945
Net assets 1,103,252 1,119,474
Equity
Share capital 25 12,462 12,462
Share premium reserve 25 500,386 500,386
Capital reduction reserve 25 553,113 629,196
Share based payment reserve 16 -
Cash flow hedge reserve 26 - 1,539
Other reserves (112) 32
Retained earnings 37,387 (24,141)
Total equity 1,103,252 1,119,474
Net asset value per share - basic 30 88.5 pence 89.8 pence
Net asset value per share -diluted 30 88.4 pence 89.8 pence
EPRA NTA per share 30 87.1 pence 87.0 pence
The consolidated financial statements were approved and authorised for issue
by the Board of Directors on 16 September 2025 and were signed on its behalf
by: Nick Hewson (Chair)
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 30 June 2025
Share premium Capital reduction Share based payment reserve Cash flow hedge reserve £'000 Other
Share capital £'000 reserve £'000 reserve £'000 reserve Retained earnings £'000
£'000 £'000 Total £'000
As at 1 July 2024 12,462 500,386 629,196 - 1,539 32 (24,141) 1,119,474
Comprehensive income for the year:
Profit for the year - - - - - - 61,528 61,528
Recycled from comprehensive income to profit and loss - - - - (1,539) - - (1,539)
Other comprehensive income - - - - - (144) - (144)
Total comprehensive Income for the year - - - - (1,539) (144) 61,528 59,845
Transactions with owners
Equity-settled share-based transactions - - - 16 - - - 16
Interim dividends paid - - (76,083) - - - - (76,083)
As at 30 June 2025 12,462 500,386 553,113 16 - (112) 37,387 1,103,252
For the year ended 30 June 2024
Share capital £'000 Share premium Cash flow hedge reserve £'000 Other reserve Capital reduction Retained earnings £'000 Total £'000
reserve £'000 £'000 reserve
£'000
As at 1 July 2023 12,462 500,386 3,304 - 704,531 (2,957) 1,217,726
Comprehensive income for the year
Loss for the year - - - - - (21,184) (21,184)
Recycled from comprehensive income to profit and loss - - (1,154) - - - (1,154)
Other comprehensive income - - (611) 32 - - (579)
Total comprehensive income for the year - - (1,765) 32 - (21,184) (22,917)
Transactions with owners
Interim dividends paid - - - - (75,335) - (75,335)
As at 30 June 2024 12,462 500,386 1,539 32 629,196 (24,141) 1,119,474
The accompanying notes on pages 114 to 145 form an integral part of these
Group Financial Statements.
Notes Year to Year to
CONSOLIDATED CASH FLOW STATEMENT 30 June 2025 £'000 30 June 2024 £'000
For the year ended 30 June 2025
Operating activities
Profit/(loss) for the year 61,528 (21,184)
Adjustments for:
Tax credit (871) (140)
Changes in fair value of interest rate derivatives measured at fair value 18,842 31,251
through profit and loss
Changes in fair value of investment properties 14 (28,001) 65,825
Movement in rent smoothing and lease incentive adjustments 4 (2,315) (2,434)
Amortisation of lease fees 59 18
Finance income 10 (19,688) (23,781)
Finance expense 10 46,673 40,043
Share of income from joint venture (1,540) -
Loss on disposal of investment property 1,327 -
Share based payment movement 16 -
Foreign exchange movements (309) -
Cash flows from operating activities before changes 75,721 89,598
in working capital
Increase in trade and other receivables (4,234) (2,996)
(Decrease)/increase in deferred rental income (5,156) 3,202
(Decrease)/ increase in trade and other payables (197) 2,252
Net cash flows from operating activities 66,134 92,056
Investing activities
Acquisition of equipment (32) -
Acquisition and development of investment properties 14 (78,355) (136,184)
Capitalised costs (4,102) (10,266)
Disposal of investment properties 262,665 -
Bank interest received 113 78
Receipts from other financial assets 290 290
Settlement of Joint Venture carried interest - (7,500)
Proceeds from disposal of Joint Venture - 134,912
Net cash flows from/(used in) investing activities 180,579 (18,670)
Notes Year to Year to
30 June 2025 £'000 30 June 2024 £'000
Financing activities
Bank borrowings drawn 24 371,305 217,560
Bank borrowings repaid 24 (463,635) (191,077)
Loan arrangement fees paid (2,156) (1,318)
Bank interest paid (44,404) (35,275)
Settlement of interest rate derivatives 21,176 21,182
Sale of interest rate derivatives 21 3,249 38,482
Purchase of interest rate derivative 21 (1,169) (45,364)
Bank commitment fees paid (669) (1,031)
Dividends paid to equity holders (73,820) (75,335)
Net cash flows used in financing activities (190,123) (72,176)
Net increase in cash and cash equivalents in the year 56,590 1,210
Cash and cash equivalents at the beginning of the year 38,691 37,481
Cash and cash equivalents at the end of the year 95,281 38,691
The accompanying notes on pages 114 to 145 form an integral part of these
Group Financial Statements.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENT
1. Basis of preparation
General information
Supermarket Income REIT plc (the "Company") is a company registered in England
and Wales with its registered office at 3(rd) Floor, 10 Bishops Square,
London, E1 6EG. The principal activity of the Company and its subsidiaries
(the "Group") is to provide its Shareholders with an attractive level of
income together with the potential for capital growth by investing in a
diversified portfolio of supermarket real estate assets in the UK.
At 30 June 2025 the Group comprised the Company and its wholly owned
subsidiaries as set out in Note 15.
Basis of preparation
The consolidated financial information set out in this preliminary
announcement covers the year to 30 June 2025, with comparative figures
relating to the year to 30 June 2024, and includes the results and net assets
of the Group. The financial information has been prepared on the basis of the
accounting policies set out in the financial statements for the year ended 30
June 2025. Whilst the financial information included in this announcement has
been computed in accordance with the recognition and measurement requirements
of UK adopted international accounting standards this announcement does not
itself contain sufficient information to comply with IFRS.
The financial information does not constitute the Group's financial statements
for the years ended 30 June 2025 or 30 June 2024, but is derived from those
financial statements. Those financial statements give a true and fair view of
the assets, liabilities, financial position and results of the Group.
Financial statements for the year ended 30 June 2024 have been delivered to
the Registrar of Companies and those for the year ended 30 June 2025 will be
delivered following the Company's AGM. The auditors' reports on both the 30
June 2025 and 30 June 2024 financial statements were unqualified; did not draw
attention to any matters by way of emphasis; and did not contain statements
under section 498 (2) or (3) of the Companies Act 2006.
The principal accounting policies applied in the preparation of the
consolidated financial statements are set out below. These policies have been
consistently applied to all years presented, other than where new policies
have been adopted.
Going concern
In light of the current macroeconomic backdrop, the Directors have placed a
particular focus on the appropriateness of adopting the going concern basis in
preparing the Group's and Company's financial statements for the year ended 30
June 2025. In assessing the going concern basis of accounting the Directors
have had regard to the guidance issued by the Financial Reporting Council.
Liquidity
At 30 June 2025, the Group had £95.3 million in cash and undrawn committed
facilities totalling £117.0 million with no capital commitments or contingent
liabilities.
After the year end, the Group also increased its direct debt capacity from
£724.0 million to £974.0 million, leaving undrawn committed facilities of
£350.0 million available.
The Directors are of the belief that the Group continues to be well funded
during the going concern period with no concerns over its liquidity.
Refinancing events
At the date of signing the financial statements, the £104.5 million SMBC
facilities fall due for repayment during the going concern period. The Group
has £350.0 million debt capacity which can be utilised to refinance the SMBC
facility in September 2026, whilst there remains the option to extend this
facility.
Covenants
The Group's debt facilities include covenants in respect of LTV, interest
cover, unencumbered assets and priority debt.
The Directors have evaluated a number of scenarios as part of the Group's
going concern assessment and considered the impact of these scenarios on the
Group's continued compliance with debt covenants. The key assumptions that
have been sensitised within these scenarios are falls in rental income and
increases in administrative cost inflation.
As at the date of issuance of this Annual Report 100% of contractual rent for
the period has been collected. The Group benefits from a secure income stream
from its property assets that are let to tenants with excellent covenant
strength under long leases that are subject to upward only rent reviews.
The list of scenarios are below and are all on top of the base case model
which includes prudent assumptions on valuations and cost inflation. The Group
is 100% fixed or hedged (including post period end refinancings). No
sensitivity for movements in interest rates have been modelled for the hedged
debt during the going concern assessment period.
Scenario Rental Income Costs
Base case scenario (Scenario 1) 100% contractual rent received when due and rent reviews based on forward In line with Company FY26 budget and increased by inflation thereafter.
looking inflation curve, capped at the contractual rate of the individual
leases.
Scenario 2 Rental income to fall by 20% Costs expected to remain the same as the base case.
Scenario 3 Rental income expected to remain the same as the base case. 10% increases on base case costs to all administrative expenses
The Group continues to maintain covenant compliance throughout the going
concern assessment period under each of the scenarios modelled. The lowest
amount of ICR headroom experienced in the worst-case stress scenarios was
18.3%. Property values would have to fall by more than 40.5% before LTV
covenants are breached against 30 June 2025 Group valuations.
Having reviewed and considered the scenarios, the Directors consider that the
Group has adequate resources in place for at least 12 months from the date of
these results and have therefore adopted the going concern basis of accounting
in preparing the Annual Report.
Accounting convention and currency
The consolidated financial statements (the "financial statements") have been
prepared on a historical cost basis, except that investment properties,
equity-settled share based payments and interest rate derivatives measured at
fair value.
The financial statements are presented in Pounds Sterling and all values are
rounded to the nearest thousand (£'000), except where otherwise indicated.
Pounds Sterling is the functional currency of the Company and the presentation
currency of the Group.
Euro denominated results of the French operation have been converted to
Sterling at the average exchange rate for the year or from the period from
acquisition to 30 June 2025 of €1:£0.85, which is considered not to produce
materially different results from using the actual rates at the date of the
transactions. Year end balances have been converted to sterling at the 30 June
2025 exchange rate of €1:£0.86. The accounting policy for foreign currency
translation is in note 2.
Adoption of new and revised standards
There were a number of new standards and amendments to existing standards
which are required for the Group's accounting period beginning on 1 July 2024.
The following amendments are effective for the period beginning 1 July 2024:
- Lack of exchangeability (Amendments to IAS 21 The Effects of
Changes in Foreign Exchange Rates)
There was no material effect from the adoption of the above-mentioned
amendments to IFRS effective in the period. They have no significant impact to
the Group as they are either not relevant to the Group's activities or require
accounting which is already consistent with the Group's current accounting
policies.
In the current financial year, the Group has adopted a number of minor
amendments to standards effective in the year issued by the IASB as adopted by
the UK Endorsement Board, none of which have had a material impact on the
Group.
There was no material effect from the adoption of other amendments to IFRS
effective in the year. They have no significant impact on the Group as they
are either not relevant to the Group's activities or require accounting which
is consistent with the Group's current accounting policies.
Standards and interpretations in issue not yet adopted
The following are new standards, interpretations and amendments, which are not
yet effective, and have not been early adopted in these financial statements,
that will or may have an effect on the Group's future financial statements:
· Amendments to the Classification and Measurement of Financial
Instruments (Amendments to IFRS 9 and IFRS 7)
· IFRS 18 Presentation and Disclosure in Financial Statements
· IFRS 19 Subsidiaries without Public Accountability: Disclosures
The Group expects to review and determine the impact of the new standards on
the Group's reporting and financial statements over the coming financial year.
There are other new standards and amendments to standards and interpretations
which have been issued that are effective in future accounting periods, and
which the Group has decided not to adopt early. None of these are expected to
have a material impact on the condensed consolidated financial statements of
the Group.
Significant accounting judgements, estimates and assumptions
The preparation of these financial statements in accordance with IFRS requires
the Directors of the Company to make judgements, estimates and assumptions
that affect the reported amounts recognised in the financial statements.
Key estimate: Fair value of investment properties
The fair value of the Group's investment properties is determined by the
Group's independent valuer on the basis of market value in accordance with the
RICS Valuation - Global Standards (the "Red Book"). Recognised valuation
techniques are used by the independent valuer which are in accordance with
those recommended by the International Valuation Standard Committee and
compliant with IFRS 13 'Fair Value Measurement.'
The independent valuer did not include any material valuation uncertainty
clause in relation to the valuation of the Group's investment property for 30
June 2025 or 30 June 2024.
The independent valuer is considered to have sufficient current local and
national knowledge of the supermarket property market and the requisite skills
and understanding to undertake the valuation competently.
In forming an opinion as to fair value, the independent valuer makes a series
of assumptions, which are typically market-related, such as those in relation
to net initial yields and expected rental values. These are based on the
independent valuer's professional judgement. Other factors taken into account
by the independent valuer in arriving at the valuation of the Group's
investment properties include the length of property leases, the location of
the properties and the strength of tenant covenants.
The fair value of the Group's investment properties as determined by the
independent valuer, along with the significant methods and assumptions used in
estimating this fair value, are set out in note 14.
Key judgement: Acquisition of investment properties
The Group has acquired and intends to acquire further investment properties.
At the time of each purchase the Directors assess whether an acquisition
represents the acquisition of an asset or the acquisition of a business.
Under the Definition of a Business (Amendments to IFRS 3 "Business
Combinations"), to be considered as a business, an acquired set of activities
and assets must include, at a minimum, an input and a substantive process that
together significantly contribute to the ability to create outputs. The
optional 'concentration test' is also applied, where if substantially all of
the fair value of gross assets acquired is concentrated in a single asset (or
a group of similar assets), the assets acquired would not represent a
business.
During the year, the Group completed two acquisitions; this includes the
acquisition of nine(82) French properties in a single transaction. In both
cases the concentration test was applied and met, resulting in the
acquisitions being accounted for as asset purchases.
Key judgement: Sale and leaseback transactions
The Group acquires properties under a sale and leaseback arrangement. At the
time of the purchase the Directors assess whether the acquisition represents a
true sale to determine whether the assets can be accounted for as Investment
Properties under IFRS 16.
Under IFRS 15, for the transfer of an asset to be accounted for as a true
sale, satisfying a performance obligation of transferring control of an asset
must be met for this to be deemed a property transaction and accounted for
under IFRS 16.
During the year, the Group acquired nine(83) stores (2024: 17 stores) in
France under sale and leaseback arrangements. The terms of the sale and
underlying lease were reviewed for indicators of control and deemed that the
significant risks and rewards to ownership were transferred to the Group and
therefore was accounted for as an investment property acquisition.
Key judgement: Joint ventures - joint control
During the year, the Group entered into a 50:50 Joint Venture ("JV") with
funds managed by Blue Owl Capital ("Blue Owl"). This was seeded with eight
supermarket properties from the Group's existing portfolio which had a
combined investment property value of £403.3 million. The classification and
accounting treatment of the Joint Venture Interest in the Group's consolidated
financial statements is subject to judgement due to the significance of the
transaction. By reference to the contractual arrangements and deeds that
regulate the joint venture, it was necessary to determine whether the Group,
together with the other key parties had the ability to jointly control the
structure through their respective rights as defined by the contractual
arrangements and deeds of the structure.
The Board of Directors of Arthur JV Limited, being the parent company of the
JV structure, is split equally between Supermarket Income REIT plc and Blue
Owl representatives. Decisions of the JV require unanimous consent since there
are equal voting rights and an equal economic interest in the net assets of
the JV.
The Directors therefore concluded that through its JV interest, the Group has
joint control of the joint venture and as such is accounted for using the
equity method of accounting under IAS 28.
2. Summary of material accounting policies
The material accounting policies applied in the preparation of the
consolidated financial statements are set out below.
2.1. Basis of consolidation
The consolidated financial statements comprise the financial statements of the
Company and all of its subsidiaries drawn up to 30 June 2025.
Subsidiaries are those entities including special purpose entities, directly
or indirectly controlled
by the Company. Control exists when the Company is exposed or has rights to
variable returns from
its investment with the investee and has the ability to affect those returns
through its power over
the investee. In assessing control, potential voting rights that presently are
exercisable are taken
into account.
The financial statements of subsidiaries are included in the consolidated
financial statements from
the date that control commences until the date that control ceases.
In preparing the consolidated financial statements, intra group balances,
transactions and unrealised gains or losses are eliminated in full.
Uniform accounting policies are adopted for all entities within the Group.
2.2. Rental income
Rental income arising on investment properties is accounted for in profit or
loss on a straight-line basis over the lease term, as adjusted for the
following:
· Any rental income from fixed and minimum guaranteed rent review uplifts
is recognised on
a straight-line basis over the lease term, variable lease uplift calculations
are not rebased when a rent review occurs and the variable payment becomes
fixed; and
· Lease incentives and initial costs to arrange leases are spread evenly
over the lease term, even if payments are not made on such a basis. The lease
term is the non-cancellable period of the lease together with any further term
for which the tenant has the option to continue the lease, where, at the
inception of the lease, the Directors are reasonably certain that the tenant
will exercise that option.
Contingent rents, such as those arising from indexed-linked rent uplifts or
market based rent reviews, are recognised in the period in which they are
earned.
Where income is recognised in advance of the related cash flows due to fixed
and minimum guaranteed rent review uplifts or lease incentives, an adjustment
is made to ensure that the carrying value of the relevant property, including
the accrued rent relating to such uplifts or lease incentives, does not exceed
the external valuation.
Rental income is invoiced in advance with that element of invoiced rental
income that relates to a future period being included within deferred rental
income in the consolidated statement of financial position.
Surrender premiums received in the period are included in rental income.
Leases classified under IFRS 9 as financial assets recognise income received
from the tenant between finance income and a reduction of the asset value,
based on the interest rate implicit in the lease.
2.3. Service charge income
Service charge income represents amounts billed to tenants for services
provided in conjunction with leased properties based on budgeted service
charge expenditure for a given property over a given service charge year. The
Company recognises service charge income on a straight-line basis over the
service charge term.
2.4. Service charge expense
Service charge expense represents a wide range of costs related to the
operation and upkeep of the leased properties. These costs are allocated and
charged to tenants based on agreed terms and calculations as outlined in the
lease agreements with a portion being borne by the landlord where agreed.
2.5. Finance income
Finance income consists principally of interest receivable from interest rate
derivatives and income from financial assets held at amortised cost. An
adjustment is applied to reclassify amounts received upon periodic settlement
of interest rate derivatives assets from change in fair value to interest
income.
2.6. Finance expense
Finance expenses consist principally of interest payable and the amortisation
of loan arrangement fees.
Loan arrangement fees are expensed using the effective interest method over
the term of the relevant loan. Interest payable and other finance costs,
including commitment fees, which the Group incurs in connection with bank
borrowings, are expensed in the period to which they relate.
2.7. Administrative and other expenses
Administrative and other expenses, including the investment advisory fees
payable to the Investment Adviser, are recognised as a profit or loss on an
accruals basis.
2.8. Share based payments
Where equity settled share options are awarded to employees, the fair value of
the options at the date of grant is charged to the statement of comprehensive
income over the vesting period. Non-market vesting conditions are taken into
account by adjusting the number of equity instruments expected to vest at each
reporting date so that, ultimately, the cumulative amount recognised over the
vesting period is based on the number of options that eventually vest.
Non-market vesting conditions and market vesting conditions are factored into
the fair value of the options granted. As long as all other vesting conditions
are satisfied, a charge is made irrespective of whether the market vesting
conditions are satisfied. The cumulative expense is not adjusted for failure
to achieve a market vesting condition or where a non-vesting condition is not
satisfied.
Where the terms and conditions of options are modified before they vest, the
increase in the fair value of the options, measured immediately before and
after the modification, is also charged to the statement of comprehensive
income over the remaining vesting period. Where equity instruments are granted
to persons other than employees, the statement of comprehensive income is
charged with the fair value of services received.
2.9. Dividends payable to Shareholders
Dividends to the Company's Shareholders are recognised when they become
legally payable, as a reduction in equity in the financial statements. Interim
equity dividends are recognised when paid. Final equity dividends will be
recognised when approved by Shareholders at an AGM.
2.10. Taxation
Non-REIT taxable income
Taxation on the Group's profit or loss for the year that is not exempt from
tax under the UK-REIT regulations comprises current and deferred tax, as
applicable. Tax is recognised in profit or loss except to the extent that it
relates to items recognised as direct movements in equity, in which case it is
similarly recognised as a direct movement in equity.
Deferred tax is provided in full using the Balance Sheet liability method on
temporary differences between the carrying amounts of assets and liabilities
for financial reporting purposes and the amounts used for taxation purposes.
Deferred tax is determined using tax rates that have been enacted or
substantively enacted by the reporting date and are expected to apply when the
asset is realised or the liability is settled.
Deferred tax assets are recognised to the extent that it is probable that
suitable taxable profits will be available against which deductible temporary
differences can be utilised.
Current tax is tax payable on any non-REIT taxable income for the year, using
tax rates enacted or substantively enacted at the end of the relevant period.
Entry to the UK-REIT regime
The Group obtained its UK-REIT status effective from 21 December 2017. Entry
to the regime results in, subject to continuing relevant UK-REIT criteria
being met, the profits of the Group's property rental business, comprising
both income and capital gains, being exempt from UK taxation.
The Group intends to ensure that it complies with the UK-REIT regulations on
an on-going basis and regularly monitors the conditions required to maintain
REIT status.
2.11. Investment properties
Investment properties consist of land and buildings which are held to earn
income together with the potential for capital growth.
Investment properties are recognised when the risks and rewards of ownership
have been transferred and are measured initially at cost, being the fair value
of the consideration given, including transaction costs. Where the purchase
price (or proportion thereof) of an investment property is settled through the
issue of new ordinary shares in the Company, the number of shares issued is
such that the fair value of the share consideration is equal to the fair value
of the asset being acquired. Transaction costs include transfer taxes and
professional fees for legal services. Any subsequent capital expenditure
incurred in improving investment properties is capitalised in the period
incurred and included within the book cost of the property. All other property
expenditure is written off in profit or loss as incurred.
After initial recognition, investment properties are measured at fair value,
with gains and losses recognised in profit or loss in the period in which they
arise.
Gains and losses on disposals of investment properties will be determined as
the difference between the net disposal proceeds and the carrying value of the
relevant asset. These will be recognised in profit or loss in the period in
which they arise.
2.12. Foreign currency transactions
Foreign currency transactions are translated to the respective functional
currency of Group entities at the foreign exchange rate ruling on the
transaction date. Foreign exchange gains and losses resulting from settling
these, or from retranslating monetary assets and liabilities held in foreign
currencies, are booked in the Income Statement. The exception is for foreign
currency loans and derivatives that hedge investments in foreign subsidiaries,
where exchange differences are booked in other reserves until the investment
is realised.
Assets and liabilities of foreign entities are translated into sterling at
exchange rates ruling at the Balance Sheet date. Their income, expenses and
cash flows are translated at the average rate for the period or at spot rate
for significant items. Resultant exchange differences are booked in Other
Comprehensive Income and recognised in the Group Income Statement when the
operation is sold.
Exchange difference on non-monetary items measured at fair value through
profit or loss, being the value movement of the investment properties, are
recognised as part of the total fair value movement for the portfolio.
2.13. Financial assets and liabilities
Financial assets and liabilities are recognised when the relevant Group entity
becomes a party to the unconditional contractual terms of an instrument.
Unless otherwise indicated, the carrying amounts
of financial assets and liabilities are considered by the Directors to be
reasonable estimates of their
fair values.
Financial assets
Financial assets are recognised initially at their fair value. All of the
Group's financial assets, except interest rate derivatives, are held at
amortised cost using the effective interest method, less any impairment.
For assets where changes in cash flows are linked to changes in an inflation
index, the Group updates the effective interest rate at the end of each
reporting period and this is reflected in the carrying amount of the asset in
each reporting period until the asset is derecognised.
Cash and cash equivalents
Cash and cash equivalents consist of cash in hand and short-term deposits in
banks with an original maturity of three months or less.
Trade and other receivables
Trade and other receivables, including rents receivable, are recognised and
carried at the lower of their original invoiced value and recoverable amount.
Provisions for impairment are calculated using an expected credit loss model.
Balances will be written-off in profit or loss in circumstances where the
probability of recovery is assessed as being remote.
Trade and other payables
Trade and other payables are recognised initially at their fair value and
subsequently at amortised cost.
Bank borrowings
Bank borrowings are initially recognised at fair value net of attributable
transaction costs. After initial recognition, bank borrowings are subsequently
measured at amortised cost, using the effective interest method. The effective
interest rate is calculated to include all associated transaction costs.
In the event of a modification to the terms of a loan agreement, the Group
considers both the quantitative and qualitative impact of the changes. Where a
modification is considered substantial, the existing facility is treated as
settled and the new facility is recognised. Where the modification is not
considered substantial, the carrying value of the liability is restated to the
present value of the cash flows of the modified arrangement, discounted using
the effective interest rate of the original arrangement. The difference is
recognised as a gain or loss on refinancing through the statement of
comprehensive income.
Derivative financial instruments and hedge accounting
The Group's derivative financial instruments currently comprise of interest
rate swaps/caps. Derivatives designated as hedging instruments utilise hedge
accounting under IAS 39. Derivatives not designated under hedge accounting are
accounted for under IFRS 9.
These instruments are used to manage the Group's cash flow interest rate risk.
The instruments are initially recognised at fair value on the date that the
derivative contract is entered into, being the cost of any premium paid at
inception, and are subsequently re-measured at their fair value at each
reporting date.
Derivatives are classified as current or non-current based on their settlement
timing, with portions due within 12 months of the balance sheet date
classified as current and those settling later as non-current.
Fair value measurement of derivative financial instruments
The fair value of derivative financial instruments is the estimated amount
that the Group would receive or pay to terminate the agreement at the period
end date, taking into account current interest rate expectations and the
current credit rating of the relevant group entity and its counterparties.
The Group uses valuation techniques that are appropriate in the circumstances
and for which sufficient data is available to measure fair value, maximising
the use of relevant observable inputs and minimising the use of unobservable
inputs significant to the fair value measurement as a whole.
A number of assumptions are used in determining the fair values including
estimations over future interest rates and therefore future cash flows. The
fair value represents the net present value of the difference between the cash
flows produced by the contract rate and the valuation rate.
Hedge accounting
At the inception of a hedging transaction, the Group documents the
relationship between hedging instruments and hedged items, as well as its risk
management objectives and strategy for undertaking the hedging transaction.
The Group also documents its assessment, both at hedge inception and on an
ongoing basis, of whether the derivatives that are used in hedging
transactions are highly effective in offsetting changes in fair values or cash
flows of hedged items.
Assuming the criteria for applying hedge accounting continue to be met the
effective portion of gains and losses on the revaluation of such instruments
are recognised in other comprehensive income and accumulated in the cash flow
hedging reserve. Any ineffective portion of such gains and losses will be
recognised in profit or loss within finance income or expense as appropriate.
The cumulative gain or loss recognised in other comprehensive income is
reclassified from the cash flow hedge reserve to profit or loss (finance
expense) at the same time as the related hedged interest expense is
recognised.
Interest rate derivatives that do not qualify under hedge accounting are
carried in the Group Statement of Financial Position at fair value, with
changes in fair value recognised in the Group Statement of Comprehensive
Income, net of interest receivable/payable from the derivatives shown in the
finance income or expense line.
2.14. Equity instruments
Equity instruments issued by the Company are recorded at the amount of the
proceeds received, net of directly attributable issue costs. Costs not
directly attributable to the issue are immediately expensed in profit or loss.
No shares were issued in the period.
2.15. Fair value measurements and hierarchy
Fair value is the price that would be received on the sale of an asset, or
paid to transfer a liability,
in an orderly transaction between market participants at the measurement date.
The fair value measurement is based on the presumption that the transaction
takes place either in the principal market for the asset or liability, or in
the absence of a principal market, in the most advantageous market. It is
based on the assumptions that market participants would use when pricing the
asset
or liability, assuming they act in their economic best interest. A fair value
measurement of a non-financial asset takes into account the best and highest
value use for that asset.
The fair value hierarchy to be applied under IFRS 13 is as follows:
Level 1: Quoted (unadjusted) market prices in active markets for identical
assets or liabilities.
Level 2: Valuation techniques for which the lowest level input that is
significant to the fair value measurement is directly or indirectly
observable.
Level 3: Valuation techniques for which the lowest level input that is
significant to the fair value measurement is unobservable.
For assets and liabilities that are carried at fair value and which will be
recorded in the financial statements on a recurring basis, the Group will
determine whether transfers have occurred between levels in the hierarchy by
reassessing categorisation at the end of each reporting period.
3. Operating Segments
Operating segments are identified on the basis of internal financial reports
about components of the Group that are regularly reviewed by the chief
operating decision maker (which in the Group's case is the Board) in order to
allocate resources to the segments and to assess their performance.
The internal financial reports contain financial information at a Group level
as a whole and there are no reconciling items between the results contained in
these reports and the amounts reported in the consolidated financial
statements. These internal financial reports include the IFRS figures but also
report the non-IFRS figures for the EPRA and alternative performance measures
as disclosed in Notes 12, 30 and the Additional Information.
The Group's property portfolio comprises investment property. The Board
considers that all the properties have similar economic characteristics.
Therefore, in the view of the Board, there is one reportable segment.
The geographical split of revenue and material applicable non-current assets
was:
Revenue Year to Year to
30 June 2025 £'000 30 June 2024 £'000
UK 108,593 107,063
France 5,416 788
114,009 107,851
Investment Properties As at As at
30 June 2025 30 June 2024
£'000 £'000
UK 1,320,430 1,704,280
France 95,389 63,936
1,415,819 1,768,216
4. Gross rental income
Year to Year to
30 June 2025 £'000 30 June 2024 £'000
Rental income - freehold property 64,172 58,345
Rental income - long leasehold property 49,837 49,063
Lease surrender income - 443
Gross rental income 114,009 107,851
Year to Year to
30 June 2025 30 June 2024
£'000 £'000
Service charge recoverable 7,387 6,201
Property insurance recoverable 980 621
Property tax recoverable 677 -
Total property insurance and service charge income 9,044 6,822
Total property income 123,053 114,673
Included within rental income is a £1,909,000 (2024: £2,197,000) rent
smoothing adjustment that arises as a result of IFRS 16 'Leases' requiring
that rental income in respect of leases with rents increasing by a fixed
percentage be accounted for on straight-line basis over the lease term. During
the year this resulted in an increase in rental income and an offsetting entry
being recognised in profit or loss as an adjustment to the investment property
revaluation.
Also included in rental income is a £406,000 (2024: £237,000) adjustment for
lease incentives. Tenant lease incentives are recognised on a straight-line
basis over the lease term as an adjustment to rental income. During the year
this resulted in an increase in rental income and an offsetting entry being
recognised in profit or loss as an adjustment to the investment property
revaluation.
On an annualised basis, rental income comprises £41,887,000 (2024:
£54,258,000) relating to the Group's largest tenant and £31,032,000 (2024:
£30,790,000) relating to the Group's second largest tenant. There were no
further tenants representing more than 10% of annualised gross rental income
during either year.
5. Service charge expense
Year to Year to
30 June 2025 £'000 30 June 2024 £'000
Service charge expenses 8,000 6,727
Property insurance expenses 1,139 714
Property tax expenses 680 -
Total property insurance and service charge expense 9,819 7,441
6. Administrative and other expenses
Year to Year to
30 June 2025 £'000 30 June 2024 £'000
Investment Adviser fees (Note 31) 6,793 9,472
Directors' Fees (Note 8) 499 410
Staff costs (Note 9) 555 -
Corporate administration fees 1,212 1,049
Legal and professional fees 2,880 1,475
Other administrative expenses 2,530 2,812
Total administrative and other expenses 14,469 15,218
During the year, the Company internalised its previously outsourced management
function (See note 31) for more information. The expense paid to Atrato Group
of £20.8 million is disclosed separately on the statement of comprehensive
income as a one-off material restructuring event.
7. Operating profit
Operating profit is stated after charging fees for:
Year to Year to
30 June 2025 £'000 30 June 2024 £'000
Audit of the Company's consolidated and individual 410 292
financial statements
Audit of subsidiaries, pursuant to legislation 93 88
Total audit services 503 380
Non audit services: interim review 44 42
Total audit and non audit services 547 422
The Group's auditor did not provide any other services in the year (2024:
£nil)
8. Directors' remuneration
The Board of Directors are the key management personnel of the Company.
The Non-Executive Directors are appointed under letters of appointment for
service while executive Directors are under an employment contract. Directors'
remuneration was as follows:
Year to Year to
30 June 2025 £'000 30 June 2024 £'000
Non-Executive Directors' fees 445 371
National Insurance 54 39
Executive Director Costs:
Wages and salaries 168 -
National insurance 18 -
Pension costs 14 -
Total Directors' remuneration 699 410
The highest paid Non-Executive Director received £97,000 (2024: £75,000) for
services during the year. The highest paid Executive Director received
£105,000 for services during the period from 25 March 2025 to 30 June 2025.
Total remuneration for key management personnel amounts to £711,000 (2024:
£410,000) which includes equity-settled share-based payments of £12,000.
For further information regarding Directors' remuneration, see the Directors'
Remuneration Report on pages 94 to 98.
9. Staff costs
Staff costs Year to Year to
30 June 2025 £'000 30 June 2024 £'000
Wages and salaries 444 -
Social security costs 54 -
Pension costs 41 -
Equity-settled share-based payments 16 -
Total staff costs 555 -
All of the staff costs above are shown within administrative and other
expenses, this also includes Executive Directors.
The staff costs were incurred in the year as part of the Internalisation of
the management function from 25 March 2025. The average number of employees
including Executive Directors since 25 March 2025 was 15.
Equity-settled share option plan
The Group established a long-term incentive plan following consultation with a
number of its largest shareholders and as outlined in the Directors'
Remuneration Policy in the circular published on 4 March 2025 in relation to
the Internalisation of the Company's management function. Employees were
granted their awards on 17 June 2025 and the vesting period is to the
announcement of the 2028 results expected to be mid September 2028.
Each employee share option converts into one ordinary share of the parent
company on exercise. No amounts are paid or payable by the recipient on
receipt of the option. The options carry neither rights to dividends nor
voting rights. Options may be exercised at any time from the date of vesting
to the date of their expiry.
The number of options granted is calculated in accordance with the
performance-based formula approved by shareholders at the previous annual
general meeting and is subject to approval by the Remuneration Committee. The
formula rewards employees to the extent of the Group's and the individual's
achievement judged against both qualitative and quantitative criteria from the
following conditions:
· Relative total shareholder return;
· Improvement in earnings per share;
· Improvement in total accounting return;
· Personal performance
Details of the share options outstanding during the year are as follows:
30 June 2025 30 June 2024
Number of share options Weighted average exercise price Number of share options Weighted average exercise price
Outstanding at the beginning of the year - - - -
Granted during the year 2,331,582 £0.01 - -
Exercised during the year - - - -
Outstanding at the year end 2,331,582 £0.01 - -
Exercisable at the year end - - - -
An independent valuation of the fair value of these shares was carried out at
the grant date. The valuation was prepared in accordance with International
Financial Reporting Standard 2 ("IFRS 2"): Share-based payments.
For the market condition of total shareholder return a Stochastic model was
used and the Black-Scholes model used for the non-market conditions. The
assumptions used are as follows:
Date of grant 17 June 2025
Share price at grant £0.83
Exercise price £0.01
Expected volatility 25.66%
Expected term 3.26 years
Risk free rate 3.94%
Expected dividend yield 0%
Fair value (market conditions) £0.4543
Fair value (non-market conditions) £0.8299
Awards to Executive Directors have a holding period of two years from vesting
and a Chaffe model was used to estimate a discount for the lack of
marketability ("DLOM"). The assumptions used are as follows:
Date of grant 17 June 2025
Share price at grant £0.83
Exercise price £0.83
Expected volatility 23.63%
Expected term 2.0 years
Risk free rate 4.07%
Expected dividend yield 0%
Fair value (market conditions) £0.4322
Fair value (non-market conditions) £0.7894
DLOM 9.21%
The Board have made an assessment of the non-market performance conditions as
at 30 June 2025, with any adjustment to expected value being recognised in the
share-based payment expense in the statement of comprehensive income.
10. Finance income and expense
Finance income Year to Year to
30 June 2025 £'000 30 June 2024 £'000
Interest received on bank deposits 113 306
Income from financial assets held at amortised cost (note 17) 502 494
Interest received on loans within Joint Venture 605 -
Finance income on unwinding of discounted receivable - 203
Finance income on settlement of interest rate derivatives (note 21) 18,468 22,778
Total finance income 19,688 23,781
Finance expense Year to Year to
30 June 2025 £'000 30 June 2024 £'000
Interest payable on bank borrowings 43,557 36,823
Commitment fees payable on bank borrowings 747 817
Amortisation of loan arrangement fees* 2,369 2,403
Total finance expense 46,673 40,043
*This includes a non-recurring exceptional charge of £236,009 (2024:
£70,000), relating to the acceleration of unamortised arrangement fees in
respect of the modification of loan facilities under IFRS 9.
The above finance expense includes the following in respect of liabilities not
classified as fair value through profit and loss:
Year to Year to
30 June 2025 £'000 30 June 2024 £'000
Total interest expense on financial liabilities held at amortised cost 45,926 39,226
Fee expense not part of effective interest rate for financial liabilities held 747 817
at amortised cost
Total finance expense 46,673 40,043
11. Taxation
A) Tax credit in profit or loss
Year to Year to
30 June 2025 £'000 30 June 2024 £'000
UK Corporation tax - -
France Corporation Tax - -
UK deferred tax - -
France deferred tax (note 23) (871) (140)
(871) (140)
B) Total tax credit
Tax credit in profit and loss as per the above (871) (140)
Share of tax expense of equity accounted joint ventures - -
Total tax credit (871) (140)
The Company and its subsidiaries operate as a UK Group REIT. Subject to
continuing compliance with certain rules, the UK REIT regime exempts the
profits of the Group's property rental business from UK corporation tax. To
operate as a UK Group REIT a number of conditions had to be satisfied in
respect of the Company, the Group's qualifying activity and the Group's
balance of business. Since the 21 December 2017 the Group has met all such
applicable conditions.
The reconciliation of the profit/(loss) before tax multiplied by the standard
rate of corporation tax for the year of 25% (2024: 25%) to the total tax
credit is as follows:
C) Reconciliation of the total tax credit for the year Year to Year to
30 June 2025 £'000 30 June 2024 £'000
Profit/(loss) on ordinary activities before taxation 60,657 (21,324)
Theoretical tax at UK standard corporation tax rate of 25% (2024: 25%) 15,164 (5,331)
Effects of:
Investment property and derivative revaluation not taxable (2,290) 24,269
Residual business losses 5,178 2,481
Disposals of investment properties 332 -
REIT exempt income (18,384) (21,419)
Deferred tax assets not recognised (871) (140)
Total tax credit for the year (871) (140)
UK REIT exempt income includes property rental income that is exempt from UK
corporation tax in accordance with Part 12 of CTA 2010.
No deferred tax asset has been recognised in respect of the Group's residual
carried forward tax losses of £61.7 million (2024: £43.4 million) as, given
the Group's REIT status, it is considered unlikely that these losses will be
utilised. The Group is subject to French Corporation tax on its French
property rental business at a rate of 25%.
12. Earnings per share
Earnings per share ("EPS") amounts are calculated by dividing the profit or
loss for the period attributable to ordinary equity holders of the Company by
the weighted average number of ordinary shares in issue during the period.
As the LTIPs issued during the year are dilutive instruments, we show the
effect of these in diluted EPRA earnings per share.
The European Public Real Estate Association ("EPRA") publishes guidelines for
calculating on a comparable basis. EPRA EPS is a measure of EPS designed by
EPRA to enable entities to present underlying earnings from core operating
activities, which excludes fair value movements on investment properties and
derivatives.
The Company has also previously included an additional earnings measure called
"Adjusted Earnings" and "Adjusted EPS." Adjusted earnings(84)( (#_ftn84) ) was
a performance measure used by the Board to assess the Group's financial
performance and dividend payments. The metric adjusted EPRA earnings by
deducting one-off items such as debt restructuring costs and adding back
finance income on derivatives held at fair value through profit and loss.
Adjusted Earnings was considered a better reflection of the measure over which
the Board assessed the Group's trading performance and dividend cover.
Following the updated September 2024 EPRA best practice recommendations
guidelines, the specific adjustments to EPRA earnings to calculate adjusted
earnings are now included within the EPRA earnings calculation. While the
result is that there is no impact to the Adjusted earnings in any prior
period, the EPRA earnings was previously reported as £53,283,000 for the year
ended 30 June 2024. As such the comparative period calculations in the table
below have been adjusted to reflect the new guidelines retrospectively.
The resultant impact of this, and the permitted EPRA adjustments to calculate
EPRA earnings in respective of non-operating or exceptional items resulted to
the Board using EPRA earnings as the key performance measure.
The reconciliation of IFRS Earnings and EPRA Earnings is shown below:
Year to Year to
30 June 2025
30 June 2024
£' 000 £' 000
Net profit/(loss) attributable to ordinary shareholders 61,528 (21,184)
EPRA adjustments:
Changes in fair value of investment properties (28,001) 65,825
Changes in fair value of interest rate derivatives measured at fair value 18,842 31,251
through profit and loss
Loss on disposal of investment properties 1,327 -
Group share of changes in fair value of joint venture investment properties (468) -
Deferred tax credit (871) (140)
Non-operating and exceptional items:
Restructuring costs in relation to the acceleration of 236 70
unamortised arrangement fees
Termination fee 20,800 -
Internalisation costs 634 -
Fees for listing on the JSE 192 -
EPRA Earnings 74,219 75,822
Number(1) Number(1)
Weighted average number of ordinary shares (Basic) 1,246,239,185 1,246,239,185
Weighted average number of ordinary shares (Diluted) 1,246,328,616 1,246,239,185
(1) Based on the weighted average number of ordinary shares in issue
Year to Year to
30 June 2025
30 June 2024
Pence per share ('p') Pence per share ('p')
Basic and Diluted EPS 4.9 (1.7)
EPRA adjustments:
Changes in fair value of investment properties (2.2) 5.3
Changes in fair value of interest rate derivatives measured at FVTPL 1.5 2.5
Loss on disposal of investment properties 0.1 -
Group share of changes in fair value of joint venture investment properties - -
Restructuring costs in relation to the acceleration of unamortised arrangement - -
fees
Non-operating and exceptional items:
Termination fee 1.7 -
Internalisation costs 0.0 -
Listing transfer fee 0.0 -
Fees for listing on the JSE - -
EPRA EPS (Basic) 6.0 6.1
EPRA EPS (Diluted) 6.0 6.1
Headline Earnings per share
The JSE listing requirements mandate the calculation of headline earnings (In
accordance with Circular 1/2023 issued by the South African Institute of
Chartered Accountants) and disclosure of a detailed reconciliation of headline
earnings to the earnings numbers used in the calculation of basic earnings per
share in accordance with the requirements of IAS 33 Earnings per share.
Disclosure of headline earnings is not a requirement of IFRS.
Year to
Year to 30 June 2024
30 June 2025 £'000
£'000
Net income/(loss) attributable to ordinary shareholders 61,528 (21,184)
Headline earnings adjustments:
Changes in fair value of investment properties (28,001) 65,825
Profit on disposal of investment properties 1,327 -
Group share of changes in fair value of joint venture investment properties (468) -
Headline earnings 34,386 44,641
Changes in fair value of interest rate derivatives measured at fair value 18,842
through profit and loss
31,251
Internalisation costs 21,434 -
Deferred tax credit (871) (140)
Restructuring costs in relation to the acceleration of unamortised arrangement 236 -
fees
Fees for listing on the JSE 192 70
EPRA earnings 74,219 75,822
Number Number
Weighted average number of ordinary shares (Basic) 1,246,239,185 1,246,239,185
Weighted average number of ordinary shares (Diluted) 1,246,328,616 1,246,239,185
Basic earnings per share 4.9 (1.7)
Diluted earnings per share 4.9 (1.7)
Headline earnings per share basic 2.8 3.6
Headline earnings per share diluted 2.8 3.6
EPRA earnings per share basic 6.0 6.1
EPRA earnings per share diluted 6.0 6.1
13. Dividends
Year to Year to
30 June 2025 £'000 30 June 2024 £'000
Amounts recognised as a distribution to ordinary Shareholders
in the year:
Dividends 76,083 75,335
On 4 July 2024, the Board declared a fourth interim dividend for the year
ended 30 June 2024 of 1.515 pence per share, which was paid on 16 August 2024
to shareholders on the register on 12 July 2024.
On 3 October 2024 the Board declared a first interim dividend for the year
ended 30 June 2025 of 1.530 pence per share, which was paid on 15 November
2024 to shareholders on the register on 11 October 2024.
On 9 January 2025 the Board declared a second interim dividend for the year
ended 30 June 2025 of 1.530 pence per share, which was paid on 28 February
2025 to shareholders on the register on 31 January 2025.
On 3 April 2025 the Board declared a third interim dividend for the year ended
30 June 2025 of 1.530 pence per share, which was paid on 23 May 2025 to
shareholders on the register on 25 April 2025.
On 3 July 2025, the Board declared a fourth interim dividend for the year
ended 30 June 2025 of 1.530 pence per share, which was paid on 22 August 2025
to shareholders on the register on 25 July 2025.
This has not been included as a liability as at 30 June 2025.
14. Investment properties
In accordance with IAS 40 "Investment Property", the Group's investment
properties have been independently valued at fair value by Cushman &
Wakefield, an accredited independent valuer with
a recognised and relevant professional qualification and with recent
experience in the locations and categories of the investment properties being
valued. The valuations have been prepared in accordance with the RICS
Valuation - Global Standards and incorporate the recommendations
of the International Valuation Standards Committee which are consistent with
the principles set out
in IFRS 13.
The independent valuer in forming its opinion on valuation makes a series of
assumptions. As explained in note 2, all the valuations of the Group's
investment property at 30 June 2025 are classified as 'level 3' in the fair
value hierarchy defined in IFRS 13.
The valuations are ultimately the responsibility of the Directors.
Accordingly, the critical assumptions used in establishing the independent
valuation are reviewed by the Board.
Freehold £'000 Long Leasehold £'000 Total £'000
At 1 July 2024 972,016 796,200 1,768,216
Property additions 28,290 49,700 77,990
Capitalised acquisition costs 2,977 1,151 4,128
Disposals into a joint venture (52,000) (351,325) (403,325)
Other disposals (63,500) - (63,500)
Revaluation movement 11,976 18,754 30,730
Currency exchange movement 1,580 - 1,580
Valuation at 30 June 2025 901,339 514,480 1,415,819
At 1 July 2023 899,440 786,250 1,685,690
Property additions 101,104 34,700 135,804
Capitalised acquisition costs 8,093 2,317 10,410
Revaluation movement (35,747) (27,067) (62,814)
Currency exchange movement (874) - (874)
Valuation at 30 June 2024 972,016 796,200 1,768,216
Reconciliation of Investment Property to Independent Property Valuation Year to Year to
30 June 2025 £'000 30 June 2024
£'000
Investment Property at fair value per Group Statement of Financial Position 1,415,819 1,768,216
Market Value of Property classified as Financial Assets held at amortised cost 7,280 7,530
(Note 17)
Total Independent Property Valuation 1,423,099 1,775,746
There were nine property acquisitions during the year (2024: 20), eight (2024:
17) of which were direct purchases of the assets in France and one (2024: nil)
acquisition of a corporate structure. The corporate acquisition is also
treated as an asset purchase rather than a business combination because it is
considered to be an acquisition of properties rather than businesses.
There were nine disposals of properties during the year (2024: nil), eight of
which are held in the Joint Venture which the Group holds a 50% stake.
Included within the carrying value of investment properties at 30 June 2025 is
£12,158,000 (2024: £10,920,000) in respect of the smoothing of fixed
contractual rent uplifts as described in note 4. The difference between rents
on a straight-line basis and rents actually receivable is included within the
carrying value of the investment properties but does not increase that
carrying value over fair value.
Included within the carrying values of investment properties at 30 June 2025
is £1,751,000 (2024: £1,033,000) in respect of the lease incentives with
tenants in the form of rent free debtors as described in note 4 and
capitalised letting fees.
The effect of these adjustments on the revaluation movement during the year is
as follows:
Year to Year to
30 June 2025 £'000 30 June 2024 £'000
Revaluation movement per above 30,730 (62,814)
Rent smoothing adjustment (note 4) (1,909) (2,197)
Movement in Lease incentives (405) (564)
Movements in capitalised letting fees (280) (218)
Foreign exchange movement through OCI (135) (32)
Change in fair value recognised in profit or loss 28,001 (65,825)
Valuation techniques and key unobservable inputs
Valuation techniques used to derive fair values
The valuations have been prepared on the basis of market value which is
defined in the RICS Valuation Standards as 'the estimated amount for which an
asset or liability should exchange on the date of
the valuation between a willing buyer and a willing seller in an arm's length
transaction after proper marketing wherein the parties had each acted
knowledgeably, prudently and without compulsion'. Market value as defined in
the RICS Valuation Standards is the equivalent of fair value under IFRS.
The yield methodology approach is used when valuing the Group's properties
which uses market rental values capitalised with a market capitalisation rate.
This is sense-checked against the market comparable method (or market
comparable approach) where a property's fair value is estimated based on
comparable transactions in the market.
Unobservable inputs
Significant unobservable inputs include: the passing rent and estimated rental
value ("ERV") based on market conditions prevailing at the valuation date and
net initial yield. Other unobservable inputs include but are not limited to
the future rental growth - the estimated average increase in rent based on
both market estimations and contractual situations, and the physical condition
of the individual properties determined by inspection.
A decrease in passing rent and ERV would decrease the fair value. A decrease
in net initial yield would increase the fair value.
Sensitivity of measurement of significant valuation inputs
As described in note 2 the determination of the valuation of the Group's
investment property portfolio is open to judgement and is inherently
subjective by nature.
Sensitivity analysis - impact of changes in net initial yields and rental
values
Year to 30 June 2025
UK France
Total
Fair value £1,320.4m £95.4m
£1,415.8m
Range of Net Initial Yields 5.0%-7.9% 5.9%-7.1% 5.0%-7.9%
Range of Rental values (passing rents or ERV as relevant) of Group's £0.3m-£5.1m £0.6m-£0.9m £0.3m-£5.1m
Investment Properties
Weighted average of Net Initial Yields 5.8% 6.5% 5.8%
Weighted average of Rental values (passing rents or ERV as relevant) of £2.7m £0.7m £2.9m
Group's Investment Properties
Year to 30 June 2024
UK France
Total
Fair value £1,704.3m £63.9m
£1,768.2m
Range of Net Initial Yields 4.6% - 8.0% 4.2% - 6.8% 4.6% - 8.0%
Range of Rental values (passing rents or ERV as relevant) of Group's £0.3m - £5.1m £0.6m - £0.8m £0.3m - £5.1m
Investment Properties
Weighted average of Net Initial Yields 5.9% 6.3% 5.9%
Weighted average of Rental values (passing rents or ERV as relevant) of £2.9m £0.7m £2.9m
Group's Investment Properties
The table below analyses the sensitivity on the fair value of investment
properties for changes in rental values and net initial yields:
+2% -2% +0.5% Net Initial Yield -0.5%
Rental value Rental value £m Net Initial Yield
£m £m £m
Increase/(decrease) in the fair value of investment properties as at 30 June 28.3 (28.3) (112.9) 134.5
2025
Increase/(decrease) in the fair value of investment properties as at 30 June 35.4 (35.4) (138.1) 164.1
2024
15. Subsidiaries
The entities listed in the following table were the subsidiary undertakings of
the Company at 30 June 2025 all of which are wholly owned. All but those noted
as Jersey or French entities below are subsidiary undertakings incorporated in
England.
Company name Holding Nature of business
type
Supermarket Income Investments UK Limited(+) Direct Intermediate parent company
Supermarket Income Investments (Midco2) UK Limited(+) Direct Intermediate parent company
Supermarket Income Investments (Midco3) UK Limited(+) Direct Intermediate parent company
Supermarket Income Investments (Midco4) UK Limited(+) Direct Intermediate parent company
SII UK Halliwell (MIDCO) LTD(+) Direct Intermediate parent company
Supermarket Income Investments UK (Midco6) Limited(+) Direct Intermediate parent company
Supermarket Income Investments UK (Midco7) Limited(+) Direct Intermediate parent company
Supermarket Income Investments UK (Midco8) Limited(+) Direct Intermediate parent company
Supermarket Income Investments UK (Midco9) Limited(+) Direct Intermediate parent company
Supermarket Income Investments UK (Midco10) Limited*(-) Direct Investment in Joint Venture
SUPR Green Energy Limited(+) Direct Energy provision company
SUPR Finco Limited(+) Direct Holding company
SUPR Management Limited*(+) Direct Management company
Supermarket Income Investments UK (NO1) Limited(+) Indirect Property investment
Supermarket Income Investments UK (NO2) Limited(+) Indirect Property investment
Supermarket Income Investments UK (NO3) Limited(+) Indirect Property investment
Supermarket Income Investments UK (NO5) Limited(+) Indirect Property investment
Supermarket Income Investments UK (NO7) Limited(+) Indirect Property investment
Supermarket Income Investments UK (NO8) Limited(+) Indirect Property investment
Supermarket Income Investments UK (NO10) Limited(+) Indirect Property investment
Supermarket Income Investments UK (NO11) Limited(+) Indirect Property investment
Supermarket Income Investments UK (NO12) Limited(+) Indirect Property investment
Supermarket Income Investments UK (NO16) Limited(+) Indirect Property investment
Supermarket Income Investments UK (NO16a) Limited(+) Indirect Property investment
Supermarket Income Investments UK (NO16b) Limited(+) Indirect Property investment
Supermarket Income Investments UK (NO16c) Limited(+) Indirect Property investment
Supermarket Income Investments UK (NO17) Limited(+) Indirect Property investment
TPP Investments Limited(+) Indirect Property investment
T (Partnership) Limited(+) Indirect Property investment
The TBL Property Partnership Indirect Property investment
Supermarket Income Investments UK (NO19) Limited(+) Indirect Property investment
Supermarket Income Investments UK (NO20) Limited(+) Indirect Property investment
Supermarket Income Investments UK (NO21) Limited(+) Indirect Property investment
Supermarket Income Investments UK (NO22) Limited(+) Indirect Property investment
Supermarket Income Investments UK (NO23) Limited(+) Indirect Property investment
Supermarket Income Investments UK (NO24) Limited(+) Indirect Property investment
Supermarket Income Investments UK (NO25) Limited(+) Indirect Property investment
Supermarket Income Investments UK (NO26) Limited(+) Indirect Property investment
Supermarket Income Investments UK (NO27) Limited(+) Indirect Property investment
Supermarket Income Investments UK (NO29) Limited(+) Indirect Property investment
Supermarket Income Investments UK (NO30) Limited(+) Indirect Property investment
Supermarket Income Investments UK (NO31) Limited(+) Indirect Property investment
Supermarket Income Investments UK (NO32) Limited(+) Indirect Property investment
Supermarket Income Investments UK (NO33) Limited(+) Indirect Property investment
Supermarket Income Investments UK (NO34) Limited(+) Indirect Property investment
Supermarket Income Investments UK (NO35) Limited^(-) Indirect Property investment
Supermarket Income Investments UK (NO36) Limited(+) Indirect Property investment
Supermarket Income Investments UK (NO37) Limited(+) Indirect Property investment
Supermarket Income Investments UK (NO.38) Limited(+) Indirect Property investment
Supermarket Income Investments UK (NO39) Limited^(-) Indirect Property investment
Supermarket Income Investments UK (NO40) Limited(+) Indirect Property investment
Supermarket Income Investments UK (NO41) Limited(+) Indirect Property investment
Supermarket Income Investments UK (NO42) Limited(+) Indirect Property investment
Supermarket Income Investments UK (NO44) Limited(+) Indirect Property investment
Supermarket Income Investments UK (NO45) Limited(+) Indirect Property investment
Supermarket Income Investments UK (NO49) Limited Indirect Property investment
Supermarket Income Investments UK (NO52) Limited*(+) Indirect Property investment
Supermarket Income Investments UK (NO53) Limited*(+) Indirect Property investment
Supermarket Income Investments UK (NO54) Limited*(+) Indirect Property investment
The Brookmaker Unit Trust^(-) Indirect Property investment
Brookmaker Limited Partnership(#) Indirect Property investment
Brookmaker (GP) Limited(#) Indirect Property investment
Brookmaker (Nominee) Limited(#) Indirect Property investment
Horner REIT^- Indirect Property investment
Supermarket Income Investments France 1"¨ Indirect Property investment
Supermarket Income Investments France 2"¨ Indirect Property investment
Supermarket Income Investments France 3"¨ Indirect Property investment
Supermarket Income Investments France 4"¨ Indirect Property investment
Supermarket Income Investments France 5"¨ Indirect Property investment
Supermarket Income Investments France 6"¨ Indirect Property investment
Supermarket Income Investments France 7"*¨ Indirect Property investment
Supermarket Income Investments France 8"*¨ Indirect Property investment
Supermarket Income Investments France 9"*¨ Indirect Property investment
SII UK Halliwell (No1) LTD(+) Indirect Holding company
SII UK Halliwell (No2) LTD(+) Indirect Property investment
SII UK Halliwell (No3) LTD(+) Indirect Holding company
SII UK Halliwell (No4) LTD(+) Indirect Holding company
SII UK Halliwell (No5) LTD(+) Indirect Holding company
SII UK Halliwell (No6) LTD(+) Indirect Holding company
* New subsidiaries incorporated during the year ended 30 June 2025
** Subsidiaries acquired during the year ended 30 June 2025
^ Jersey registered entity
" France registered entity
+ Registered office: 3(rd) Floor, 10 Bishops Square, London, E1 6EG
- Registered office: 3rd Floor, Gaspe House, 66-72 Esplanade, St Helier,
Jersey, JE1 2LH
# Registered office: 8th Floor 1 Fleet Place, London, United Kingdom, EC4M 7RA
¨ Registered office: Tour Pacific, 11-13 Cours Valmy, 92977 Paris La Défense
Cedex
The following subsidiaries will be exempt from the requirements of the
Companies Act 2006 relating to the audit of individual accounts by virtue of
Section 479A of that Act.
Company name Companies House
Registration Number
SII UK Halliwell (MIDCO) LTD 12473355
SUPR Green Energy Limited 12892076
SII UK Halliwell (No1) LTD 12475261
SII UK Halliwell (No2) LTD 12475599
SII UK Halliwell (No3) LTD 12478141
SII UK Halliwell (No4) LTD 12604032
SII UK Halliwell (No5) LTD 12605175
SII UK Halliwell (No6) LTD 12606144
SUPR Finco Limited 14292760
Supermarket Income Investments UK (Midco8) Limited 15576317
Supermarket Income Investments UK (No49) Limited 15592845
Supermarket Income Investments UK (Midco 9) Limited 15977428
16. Investment in Joint Venture
As at 30 June 2025 the Group has one joint venture investment. On the 16 May
2025, the Group entered into a joint venture agreement with Blue Owl. The JV
was seeded by the Group with eight of the Group's portfolio assets valued at
£403.3 million being transferred into a new joint venture structure
summarised below. Blue Owl then purchased 50% of the net assets for a
consideration of £200.4 million.
Due to the joint control of the arrangement between the Group and Blue Owl,
this is deemed to be a joint venture under IFRS 11.
The structure contained loans due from the property bearing Companies to the
partners totalling £215.6 million, of which 50% of these were purchased by
Blue Owl on their purchase of the joint venture structure.
In June 2025, the Joint Venture completed a new £215 million secured term
loan, through a banking syndicate comprising Barclays, HSBC, ING and SMBC. The
interest-only Facility has a maturity of three years, with two further
one-year extension options at the lenders' discretion. The facility was priced
at a margin of 1.50% above SONIA and hedged at an all in rate of 5.10%.
The facility was drawn post year end and used to repay £189.5 million of the
above JV partner loans; the Group's share being £94.8 million of the £108.4
million receivable from the Joint Venture as disclosed in note 18.
The Group also earns a management fee of 0.6% per annum for the ongoing
management of Blue Owl's interest in the JV. During the year the Group earnt
£304,980 in management fees.
The joint venture ownership structure is summarised below:
Entity Partner Address and principal Ownership
place of business
Jersey
Arthur JV Limited Arthur UK Holdco Limited 22 Grenville Street, St Helier, Jersey, JE4 8PX 50%
owned by the Group
Arthur Midco Limited 22 Grenville Street, St Helier, Jersey, JE4 8PX 100%
owned by Arthur JV Limited
The Huddersfield Unit Trust Royal Chambers, St Julian's Avenue, St Peter Port, Guernsey, GY1 4HP 100%
owned by Arthur Midco Limited
United Kingdom 3(rd) Floor, 10 Bishops Square, London, E1 6EG
Supermarket Income Investments UK (No4) Limited
Supermarket Income Investments UK (No6) Limited
Supermarket Income Investments UK (No9) Limited
Supermarket Income Investments UK (No28) Limited
Supermarket Income Investments UK (No43) Limited
Supermarket Income Investments UK (No47) Limited
Supermarket Income Investments UK (No48) Limited
Supermarket Income Investments UK (No50) Limited
Supermarket Income Investments UK (No51) Limited 100%
Supermarket Income Investments Nominee Co.1 Limited owned by Arthur Midco Limited
Supermarket Income Investments Nominee Co.2 Limited
Year to
30 June 2025
£'000
Opening balance -
Investment in Joint Venture 95,016
Group's share of profit after tax 1,540
Closing balance 96,556
The joint venture entities have a 31 December year end. For accounting
purposes consolidated management accounts have been prepared for the joint
venture for the period from acquisition to 30 June 2025 using accounting
policies that are consistent with those of the Group.
Arthur JV Limited's share of the aggregate amounts recognised in the
consolidated statement of comprehensive income and consolidated statement of
financial position of the Structure are as follows:
Year to
30 June 2025
£'000
Net Rental income 3,613
Administrative and other expenses (361)
Change in fair value of investment properties 1,022
Operating profit 4,274
Finance income 22
Finance expense (1,217)
Profit before taxation 3,079
Tax charge for the period -
Profit for the period 3,079
Group's share of JV's profit for the period 1,540
As at
30 June 2025
£'000
Non-current assets
Investment properties 404,700
Total non-current assets 404,700
Current assets
Cash and cash equivalents 11,311
Total current assets 11,311
Total assets 416,011
Non-current liabilities
Deferred rental income 5,865
Loans due to JV partners 216,845
Trade and other payables 4,460
Total non-current liabilities 227,170
Total liabilities 227,170
Net assets 188,841
Group's share of the JV's net assets 94,421
17. Financial assets held at amortised cost
Year to Year to
30 June 2025 £'000 30 June 2024
£'000
At start of year 11,023 10,819
Interest income recognised in profit and loss (note 10) 502 494
Lease payments received during the period (290) (290)
At end of period 11,235 11,023
On 8 June 2022, the Group acquired an Asda store in Carcroft, via a sale and
leaseback transaction for £10.6 million, this has been recognised in the
Statement of Financial Position as a Financial asset in accordance with IFRS
9. The financial asset is measured using the amortised cost model, which
recognises the rental payments as financial income and reductions of the asset
value based on the implicit interest rate in the lease. As at 30 June 2025 the
market value of the property was estimated at £7,280,000 (2024: £7,530,000).
Assets held at amortised cost are assessed annually for impairment with any
impairment recognised as an allowance for expected credit losses measured at
an amount equal to the lifetime expected credit losses. The Group considers
historic, current and forward-looking information to determine expected credit
losses arising from either a change in the interest rate implicit in the lease
or factors impacting the customer's ability to make lease payments. Based on
the information currently available the Group does not expect any credit
losses and the asset has not been impaired in the period.
18. Trade and other receivables
As at As at
30 June 2025 £'000 30 June 2024
£'000
Interest receivable on settlement of derivatives - 4,946
Other receivables 9,725 6,077
Loans due from joint venture 108,423 -
Prepayments and accrued income 1,464 877
Total trade and other receivables 119,612 11,900
The Group applies the IFRS 9 simplified approach to measuring expected credit
losses using a lifetime expected credit loss provision for trade receivables.
To measure expected credit losses on a collective basis, trade receivables are
grouped based on similar credit risk and ageing. The expected loss rates are
based on the Group's historical credit losses experienced over the period from
incorporation to 30 June 2025. The historical loss rates are then adjusted for
current and forward-looking information on macro-economic factors affecting
the Group's customers. Both the expected credit loss provision and the
incurred loss provision in the current and prior year are immaterial. No
reasonable possible changes in the assumptions underpinning the expected
credit loss provision would give rise to a material expected credit loss.
The Directors consider that the carrying value of trade and other receivables
measured at amortised cost approximate their fair value.
The receivable from Joint Venture relates to interest bearing loans to the
Joint Venture at a market rate of interest. Post year end, £95.7 million of
these loans were repaid from proceeds from debt issued in the JV, the
remaining loan is expected to be settled before 30 June 2026. Within other
receivables is £2.4 million due to the Group from the Joint Venture relating
to non-interest bearing working capital receivables.
19. Cash and Cash Equivalents
As at As at
30 June 2025 £'000 30 June 2024
£'000
Cash and cash equivalents 95,281 38,691
Total cash and cash equivalents 95,281 38,691
Included in cash and cash equivalents is an amount of £54.1 million (2024:
£nil) held in a client account by external legal counsel in advance of a
potential acquisition, as well as £3.0 million by the property agents (2024:
£2.8 million).
20. Trade and other payables
Current As at As at
30 June 2025 £'000 30 June 2024
£'000
Accrued interest payable 7,225 8,072
Trade payables 3,630 5,901
Withholding Tax 2,263 -
Other corporate accruals 5,940 3,615
VAT payable 3,585 4,385
Total trade and other payables 22,643 21,973
Non-current As at As at
30 June 2025 £'000 30 June 2024
£'000
Deposits 1,672 1,045
Total trade and other payables 1,672 1,045
The Directors consider that the carrying value of trade and other payables
measured at amortised cost approximate their fair value.
21. Interest rate derivatives
As at As at
30 June 2025 £'000 30 June 2024
£'000
Non-current asset: Interest rate swaps 2,580 12,499
Non-current asset: Interest rate caps 553 3,242
Current Asset: Interest rate swaps 5,705 13,456
Current Asset: Interest rate cap 2,386 2,252
11,224 31,449
The rate swaps are remeasured to fair value by the counterparty bank on a
quarterly basis.
The fair value at the end of year comprises: Year to Year to
30 June 2025 £'000 30 June 2024
£'000
At start of year (net) 31,449 57,583
Interest rate derivative premium paid on inception 1,169 47,494
Disposal of interest rate derivatives (3,249) (40,612)
Accrued Interest 2,237 -
Changes in fair value of interest rate derivative in the year (P&L) (375) (8,782)
Changes in fair value of interest rate derivative in the year (OCI) (1,539) (1,456)
Credit to the income statement (P&L) (note 10) (18,468) (22,469)
Credit to the income statement (OCI) (note 10) - (309)
Fair value at end of year (net) 11,224 31,449
To partially mitigate the interest rate risk that arises as a result of
entering into the floating rate debt facilities referred to in note 22, the
Group has entered into derivative interest rate swaps and caps.
A summary of these derivatives as at 30 June 2025 are shown in the table
below:
Issuer Derivative Type Notional amount £m Mark to Market 30 June 2025 £m Average Strike Rate^ Effective Date Maturity Date
Premium Paid £m
SMBC Interest Rate Swap £67.0 £6.5 £1.7 2.06% Sep-23 Sep-26
Barclays Interest Rate Cap £96.6 £2.9 £0.7 1.40% Aug-24 Jul-25
SMBC Interest Rate Cap £96.6 £1.4 £1.2 1.40% Jul-25 Jan-26
Wells Fargo Interest Rate Swap £204.3 £22.2 £6.3 2.27% Sep-23 Jul-27
Wells Fargo Interest Rate Swap £3.2 £0.4 £0.1 0.00% Feb -24 Jul-27
SMBC Interest Rate Cap £3.0 £0.4 £0.2 1.82% Nov-23 Jun-27
SMBC Interest Rate Swap £37.5 £0.6 £0.1 3.61% Mar-24 Sep-26
Barclays Interest Rate Cap £90.0 £1.2 £0.9 3.45% May-25 Apr-28
Total £35.6 £11.2
^ The remaining average strike rate from 1 July 2025 to maturity.
99.8% of the Group's outstanding debt as at 30 June 2025 was hedged through
the use of fixed rate debt or financial instruments (30 June 2024: 90%). It is
the Group's target to hedge at least 50% of the Group's total debt at any time
using fixed rate loans or interest rate derivatives.
The Group restructured its derivatives during the year to match the changes in
its borrowings, the movements in the Group's fair value derivatives are
recognised in the profit and loss. There was one derivative terminated in the
year that hedged the Wells Fargo facility and was accounted for under hedge
accounting; on derecognition of hedge accounting, the cash flow hedge reserve
is recycled to the profit and loss over the remaining term of the Wells Fargo
facility.
The derivatives have been valued in accordance with IFRS 13 by reference to
interbank bid market rates as at the close of business on the last working day
prior to each balance sheet date. The fair values are calculated using the
present values of future cash flows, based on market forecasts of interest
rates and adjusted for the credit risk of the counterparties. The amounts and
timing of future cash flows are projected on the basis of the contractual
terms.
All interest rate derivatives are classified as level 2 in the fair value
hierarchy as defined under IFRS 13 and there were no transfers to or from
other levels of the fair value hierarchy during the year.
22. Bank borrowings
Amounts falling due within one year: As at As at
30 June 2025 £'000 30 June 2024
£'000
Secured debt - 96,560
Less: Unamortised finance costs - (44)
Bank borrowings per the consolidated statement of financial position - 96,516
Amounts falling due after more than one year:
Secured debt - 186,225
Unsecured debt 606,986 414,981
Less: Unamortised finance costs (3,384) (3,554)
Bank borrowings per the consolidated statement of financial position 603,602 597,652
Total bank borrowings 603,602 694,168
A summary of the Group's borrowing facilities as at 30 June 2025 are shown
below:
Lender Facility Credit Variable/ hedged^ Loan Amount drawn
Margin commitment 30 June 2025
Total cost of debt £m £m
Expiry
HSBC Revolving credit facility Sep 2026 1.70% 4.22%* 5.92% £75.0 £-
ING⁺ Term Loan July 2027 1.55% 3.15% 4.70% £75.0 £75.0
ING⁺ Revolving credit facility - Hedged July 2027 1.55% 3.15% 4.70% £21.6 £21.6
ING⁺ Revolving credit facility - Unhedged July 2027 1.55% 4.22%* 5.77% £3.4 £0.9
Syndicate Revolving credit facility July 2027 1.50% 2.23% 3.73% £250.0 £210.5
SMBC Term Loan Sep 2026 1.40% 2.06% 3.46% £67.0 £67.0
SMBC Term Loan Sep 2026 1.55% 3.61% 5.16% £37.5 £37.5
Private Placement⁺" Note July 2031 1.72% 2.72% 4.44% £71.1 £71.1
Private Placement⁺" Note Feb 2032 1.68% 2.42% 4.10% £33.4 £33.4
Barclays⁺ Term Loan Apr 2028 1.55% 3.45% 5.00% £90.0 £90.0
Total £724.0 £607.0
*SONIA rate as at 30 June 2025
^ Average rate from 1 July 2025 to expiry of the debt excluding extension
options.
"Drawn in Euro's and converted at the year-end rate
⁺ The new facilities completed during the year were the completion of the
two private placement facilities, the ING facilities and the Barclays
facility.
During the year the Group the following facilities matured or were repaid
early:
Lender Facility Loan
commitment
£m
Expiry
Deka Term Loan Aug 2024 £96.6
BLB Term Loan Mar 2026 £86.9
Wells Fargo Revolving credit facility Jul 2025 £39.0
Syndicate Term Loan Jul 2025 £50.0
Syndicate Term Loan Jul 2026 £50.0
Total £322.5
The Group has been in compliance with all of the financial covenants across
the Group's bank facilities as applicable throughout the periods covered by
these financial statements.
Any associated fees in arranging the bank borrowings that are unamortised as
at the end of the year are offset against amounts drawn under the facility as
shown in the table above. Part of the debt is secured by charges over the
Group's investment properties and by charges over the shares of certain Group
undertakings, not including the Company itself. There have been no defaults of
breaches of any loan covenants during the current year or any prior period.
The Group's borrowings carried at amortised cost are considered to be
approximate to their fair value, with the exception of the Private Placements.
As at 30 June 2025 the fair value of £104.5 million of private placement
notes issued was £105.3 million
Post year end, the Group completed its debut bond issuance with a £250
million sterling-denominated senior unsecured bond with a term of 6 years. The
bond bears a coupon of 5.125%.
23. Deferred tax
The deferred tax asset relates entirely to unutilised trading losses on the
Group's French resident companies.
Year to Year to
30 June 2025 30 June 2024
£'000 £'000
At the start of the year (140) -
Deferred tax on unutilised French trading losses (871) (140)
Net credit to income statement (note 11) (871) (140)
At the end of the year (1,011) (140)
Deferred tax has been calculated based on local rates applicable under local
legislation substantively enacted at the balance sheet date.
No deferred tax asset has been recognised in respect of unrealised capital
losses that would be available on disposal of the properties at a loss at the
current market value as it is considered there would not be additional French
properties to benefit against the capital loss.
24. Categories of financial instruments
As at As at
30 June 2025 £'000 30 June 2024
£'000
Financial assets
Financial assets at amortised cost:
Financial asset arising from sale and leaseback transaction 11,235 11,023
Cash and cash equivalents 95,281 38,691
Trade and other receivables 118,148 11,023
Financial assets at fair value:
Interest rate derivative 11,224 31,449
Total financial assets 235,888 92,186
Financial liabilities
Financial liabilities at amortised cost:
Secured debt - 281,635
Unsecured debt 603,602 412,533
Trade and other payables (note 20) 20,730 18,634
Total financial liabilities 624,332 712,802
At the year end, all financial assets and liabilities were measured at
amortised cost except for the interest rate derivatives which are measured at
fair value. The interest rate derivative valuation is classified as 'level 2'
in the fair value hierarchy as defined in IFRS 13 and its fair value was
calculated using the present values of future cash flows, based on market
forecasts of interest rates and adjusted for the credit risk of the
counterparties.
The carrying value of the financial assets and liabilities at amortised cost
approximate their fair value with the exception of the Private Placements. As
at 30 June 2025 the fair value of £104.5 million of private placement notes
issued was £105.3 million.
· Financial risk management
Through the Group's operations and use of debt financing it is exposed to
certain risks. The Group's financial risk management objective is to minimise
the effect of these risks, for example by using interest rate cap and interest
rate swap derivatives to partially mitigate exposure to fluctuations in
interest rates, as described in note 21.
The exposure to each financial risk considered potentially material to the
Group, how it arises and the policy for managing it is summarised below.
· Market risk - Interest rate risk
Market risk is defined as the risk that the fair value or future cash flows of
a financial instrument will fluctuate because of changes in market prices. The
Group's market risk arises from open positions in interest bearing assets and
liabilities, to the extent that these are exposed to general and specific
market movements.
The Group's interest-bearing financial instruments comprise cash and cash
equivalents and bank borrowings. 99.8% of the borrowings are hedged and
therefore at a fixed rate. Changes in market interest rates therefore effects
the value of the derivatives for the hedged debt and for the unhedged portion
it affects the Group's finance income and costs. The Group's sensitivity to
changes in interest rates, calculated on the basis of a ten-basis point
increase in the three-month SONIA daily rate/ EURIBOR, was as follows:
Year to Year to
30 June 2025 30 June 2024 £'000
£'000
Increase in profit 727 1,187
Effect on other comprehensive income and equity - -
Trade and other receivables and payables are interest free as long as they are
paid in accordance with their terms, and have payment terms of less than one
year, so it is assumed that there is no material market risk associated with
these financial instruments.
Loans to joint ventures within trade and other receivables are at a fixed
percentage rate so no material market risk associated with these financial
instruments.
· Market risk - currency risk
The Group prepares its financial statements in Sterling. 6% of the Group's
Investment Properties are denominated in Euros and as a result the Group is
subject to foreign currency exchange risk. This risk is partially hedged
because within the Group's French operations, rental income, interest costs
and the majority of both assets and liabilities are Euro denominated. An
unhedged currency risk remains on the value of the Group's net investment in,
and net returns from, its French operations.
The Group's sensitivity to changes in foreign currency exchange rates,
calculated on a 10% increase in average and closing Sterling rates against the
Euro, was as follows, with a 10% decrease having the opposite effect:
Year to Year to
30 June 2025 30 June 2024 £'000
£'000
Decrease in net assets (615) (580)
Increase in profit/(loss) for the year (614) (584)
· Market risk - inflation
Inflation risk arises from the impact of inflation on the Group's income and
expenditure. The majority of the Group's passing rent at 30 June 2025 is
subject to inflation-linked rent reviews. Consequently, the Group is exposed
to movements in the Retail Prices Index ("RPI"), which is the relevant
inflation benchmark. However, all UK inflation-linked rent review provisions
provide those rents will only be subject to upwards review with an average cap
of 4% and never downwards. As a result, 94% of the Group's income is not
exposed to a fall in rent in deflationary conditions. The Group's French
assets are subject to uncapped rent reviews, both upwards and downwards,
however only represent 6% of the Group's rent roll.
The Group does not expect inflation risk to have a material effect on the
Group's administrative expenses.
· Credit risk
Credit risk is the risk of financial loss to the Group if a counterparty fails
to meet its contractual obligations. The principal counterparties are the
Group's tenants (in respect of rent receivables arising under operating
leases) and banks (as holders of the Group's cash deposits).
The credit risk of rent receivables is considered low because the
counterparties to the operating leases are considered by the Board to be
high-quality tenants and any lease guarantors are of appropriate financial
strength. Rent collection dates and statistics are monitored to identify any
problems at an early stage, and if necessary rigorous credit control
procedures will be applied to facilitate the recovery of rent receivables. The
credit risk on cash deposits is limited because the counterparties are banks
with credit ratings which are acceptable to the Board and are kept under
review each quarter.
· Liquidity risk
Liquidity risk arises from the Group's management of working capital and the
finance costs and principal repayments on its secured debt. It is the risk
that the Group will not be able to meet its financial obligations as they fall
due.
The Group seeks to manage its liquidity risk by ensuring that sufficient cash
is available to meet its foreseeable needs. These liquidity needs are
relatively modest and are capable of being satisfied by the surplus available
after rental receipts have been applied in payment of interest as required by
the credit agreement relating to the Group's secured debt.
Before entering into any financing arrangements, the Board assesses the
resources that are expected to be available to the Group to meet its
liabilities when they fall due. These assessments are made on the basis of
both base case and downside scenarios. The Group prepares detailed management
accounts which are reviewed by the Board at least quarterly to assess ongoing
liquidity requirements and compliance with loan covenants. The Board also
keeps under review the maturity profile of the Group's cash deposits in order
to have reasonable assurance that cash will be available for the settlement of
liabilities when they fall due.
The following table shows the maturity analysis for financial assets and
liabilities. The table has been drawn up based on the undiscounted cash flows
of non-derivative financial instruments, including future interest payments,
based on the earliest date on which the Group can be required to pay and
assuming that the SONIA daily and EURIBOR rate remains at the 30 June 2025
rate. Interest rate derivatives are shown at fair value and not at their gross
undiscounted amounts as they are not materially different.
As at 30 June 2025 Less than one year £'000 One to two years £'000 Two to five years £'000 More than five years £'000 Total
£'000
Financial assets:
Cash and cash equivalents 95,281 - - - 95,281
Trade and other receivables 118,148 - - - 118,148
Financial asset at amortised cost 290 290 984 74,274 75,838
Interest rate derivatives 8,091 3,046 87 - 11,224
Total financial assets 221,810 3,336 1,071 74,274 300,491
Financial liabilities:
Bank borrowings 25,867 126,977 415,627 110,108 678,579
Trade and other payables 20,730 - - - 20,730
Total financial liabilities 46,597 126,977 415,627 110,108 699,309
As at 30 June 2024 Less than one year £'000 One to two years £'000 Two to five years £'000 More than five years £'000 Total
£'000
Financial assets:
Cash and cash equivalents 38,691 - - - 38,691
Trade and other receivables 11,023 - - - 11,023
Financial asset at amortised cost 290 290 946 74,602 76,128
Interest rate derivatives 15,708 12,209 3,532 - 31,449
Total financial assets 65,712 12,499 4,478 74,602 157,291
Financial liabilities:
Bank borrowings 119,810 186,374 443,364 - 749,548
Trade and other payables 17,589 - - 1,045 18,634
Total financial liabilities 137,399 186,374 443,364 1,045 768,182
· Capital risk management
The Board's primary objective when monitoring capital is to preserve the
Group's ability to continue as a going concern, while ensuring it remains
within its debt covenants so as to safeguard secured assets and avoid
financial penalties.
Bank borrowings on secured facilities are secured on the Group's property
portfolio by way of fixed charges over property assets and over the shares in
the property-owning subsidiaries and any intermediary holding companies of
those subsidiaries.
At 30 June 2025, the capital structure of the Group consisted of bank
borrowings (note 22), cash and cash equivalents, and equity attributable to
the Shareholders of the Company (comprising share capital, retained earnings
and the other reserves referred to in notes 25 to 27).
In managing the Group's capital structure, the Board considers the Group's
cost of capital. In order to maintain or adjust the capital structure, the
Group keeps under review the amount of any dividends or other returns to
Shareholders and monitors the extent to which the issue of new shares or the
realisation of assets may be required.
Reconciliation of financial liabilities relating to financing activities
Total bank borrowings £'000 Interest and commitment fees payable £'000 Interest rate derivatives £'000 Total
£'000
As at 1 July 2024 694,168 8,137 (31,449) 670,856
Cash flows:
Debt drawdowns in the year 371,305 - - 371,305
Debt repayments in the year (463,635) - - (463,635)
Interest and commitment fees paid - (45,073) - (45,073)
Loan arrangement fees paid (2,156) - - (2,156)
Interest rate premium paid - - (1,169) (1,169)
Interest rate derivative disposal - - 3,249 3,249
Non-cash movements:
Accrued interest in the period - - (2,237) (2,237)
Finance costs in the statement of comprehensive income 2,369 44,304 - 46,673
Finance income in the statement of comprehensive income - - 18,468 18,468
Fair value changes - - 1,914 1,914
Foreign exchange movement 1,551 - - 1,551
As at 30 June 2025 603,602 7,368 (11,224) 599,746
As at 1 July 2023 667,465 6,837 (57,583) 616,719
Cash flows:
Debt drawdowns in the year 217,560 - - 217,560
Debt repayments in the year (191,077) - - (191,077)
Interest and commitment fees paid - (36,305) - (36,305)
Loan arrangement fees paid (1,318) - - (1,318)
Interest rate premium paid - - (45,364) (45,364)
Interest rate derivative disposal - - 38,482 38,482
Non-cash movements:
Finance costs in the statement of comprehensive income 2,403 37,605 - 40,008
Finance income in the statement of comprehensive income - - 22,778 22,778
Fair value changes - - 10,238 10,238
Foreign exchange movement (865) - - (865)
As at 30 June 2024 694,168 8,137 (31,449) 670,856
The interest and commitment fees payable are included within the corporate
accruals balance in note 20. Cash flow movements are included in the
consolidated statement of cash flows and the non-cash movements are included
in note 10. The movements in the interest rate derivative financial
liabilities can be found in note 21.
25. Share capital
Ordinary Shares Share capital £'000 Share premium reserve £'000
of 1 pence
Number
As at 1 July 2024 1,246,239,185 12,462 500,386
Dividend paid in the period (note 13) - -
As at 30 June 2025 1,246,239,185 12,462 500,386
As at 1 July 2023 1,246,239,185 12,462 500,386
Dividend paid in the period (note 13) - -
As at 30 June 2024 1,246,239,185 12,462 500,386
26. Cash flow hedge reserve
Year to Year to
30 June 2025 30 June 2024 £'000
£'000
At start of the period 1,539 3,304
Recycled comprehensive income to profit and loss (1,539) (1,154)
Cash flow hedge reserve taken to profit or loss for the period on disposal of - -
interest rate derivatives
Fair value movement of interest rate derivatives in effective hedges - (611)
At the end of the period - 1,539
During the prior period, a previously hedge accounted derivative in relation
to the Wells Fargo facility was terminated. The residual balance of the
derivative was recycled to the income statement over the remaining period of
the Wells Fargo facility to repayment in May 2025.
27. Reserves
The nature and purpose of each of the reserves included within equity at 30
June 2025 are as follows:
· Share premium reserve: represents the surplus of the gross proceeds of
share issues over the nominal value of the shares, net of the direct costs of
equity issues
· Cash flow hedge reserve: represents cumulative gains or losses, net of
tax, on effective cash flow hedging instruments
· Capital reduction reserve: represents a distributable reserve created
following a Court approved reduction in capital less dividends paid.
· Retained earnings represent cumulative net gains and losses recognised
in the statement
of comprehensive income.
· Other reserves represents cumulative gains or losses, net of tax, of
foreign currency exchange rate differences recognised in a period as other
comprehensive income.
· Share-based payment reserve represents the recognition of the value of
services from employees in exchange for its own equity instruments.
The only movements in these reserves during the year are disclosed in the
consolidated statement of changes in equity.
28. Capital commitments
The Group had no capital commitments outstanding as at 30 June 2025 and 30
June 2024.
29. Operating leases
The Group's principal assets are investment properties which are leased to
third parties under non-cancellable operating leases. The leases contain
predominately fixed or inflation-linked uplifts.
The future minimum lease payments receivable under the Group's leases, are as
follows:
As at As at
30 June 2025 30 June 2024
£'000 £'000
Year 1 86,710 112,127
Year 2 85,800 111,887
Year 3 85,510 111,048
Year 4 84,997 108,241
Year 5 83,908 106,936
Year 6-10 394,251 475,626
Year 11-15 236,486 281,725
Year 16-20 44,729 62,285
Year 21-25 17,375 20,626
More than 25 years 9,649 9,998
Total 1,129,415 1,400,499
30. Net asset value per share
NAV per share is calculated by dividing the Group's net assets as shown in the
consolidated statement of financial position, by the number of ordinary shares
outstanding at the end of the year. As the LTIPs issued during the year are
dilutive instruments, we show the effect of these in diluted NAV per share.
The Group uses EPRA Net Tangible Assets as the most meaningful measure of
long-term performance and the measure which is being adopted by the majority
of UK REITs, establishing it as the industry standard benchmark. It excludes
items that are considered to have no impact in the long-term, such as the fair
value of derivatives.
NAV and EPRA NTA per share calculation are as follows:
As at As at
30 June 2025 30 June 2024
£'000 £'000
Net assets per the consolidated statement of financial position 1,103,252 1,119,474
Fair value of interest rate derivatives (note 21) (11,224) (31,449)
Fair value of financial assets at amortised cost (3,955) (3,493)
EPRA NTA 1,088,073 1,084,532
Ordinary shares in issue at 30 June -Basic 1,246,239,185 1,246,239,185
Ordinary shares in issue at 30 June - Diluted 1,248,570,767 1,246,239,185
NAV per share - Basic (pence) 88.5p 89.8p
NAV per share - diluted (pence) 88.4p 89.8p
EPRA NTA per share (pence) 87.1p 87.0p
31. Transactions with related parties
Details of the related parties to the Group in the year and the transactions
with these related parties were as follows:
a. Directors
· Directors' fees and salaries
The table below shows the remuneration per annum for the roles performed by
the Board as at 30 June 2025:
Role Jon Austen Roger Blundell Frances Davies Vince Prior Sapna Shah Cathryn Vanderspar
Robert Abraham Michael Perkins Nick Hewson
£000 £000 £000 £000
Chair of Board of Directors - - - 150 - - -
- -
Director - - 60 60 60 - 60 60 60
Audit and Risk Committee Chair 10 - - - - - -
- -
Nomination Committee Chair - - - - - 10 -
- -
Senior Independent Director - - - - - 10 -
- -
Remuneration Committee Chair - - - - - - 10
- -
ESG Committee Chair - - 10 - - - -
- -
Management Engagement Committee Chair* - - - - 10 - -
- -
Chief Executive Officer**^ - - - - - - -
405 -
Chief Financial Officer**^ - - - - - - -
- 297
** Receive Director salaries rather than Non-Executive fee
*From 16 July 2025, the Management Engagement Committee was disbanded
^Appointed 25 March 2025
The table below shows the total remuneration received by each member of the
Board for the year ended 30 June 2025:
Year to Year to
30 June 2025 30 June 2024 £'000
£'000
Nick Hewson 97 75
Jon Austen 66 62
Vince Prior 62 61
Cathryn Vanderspar 62 58
Frances Davies 62 58
Sapna Shah 68 58
Roger Blundell* 27 -
Robert Abraham ^ 105 -
Michael Perkins ^ 77 -
* Appointed 15 January 2025
^ Appointed 25 March 2025
The total remuneration payable to the Directors in respect of the current year
and previous year are disclosed in note 8.
· Directors' interests
Details of the direct and indirect interests of the Directors and their close
families in the ordinary shares of one pence each in the Company at 30 June
2025 were as follows:
· Nick Hewson: 1,405,609 shares (0.11% of issued share capital)
· Jon Austen: 305,339 shares (0.02% of issued share capital)
· Vince Prior: 213,432 shares (0.02% of issued share capital)
· Cathryn Vanderspar: 125,802 shares (0.01% of issued share capital)
· Frances Davies: 36,774 shares (0.00% of issued share capital)
· Sapna Shah: 118,862 shares (0.01% of issued share capital)
· Roger Blundell: 100,000 shares (0.01% of issued share capital)
· Robert Abraham: 162,213 shares (0.01% of issued share capital)
· Michael Perkins: 14,911 shares (0.00% of issued share capital)
Details of the direct and indirect interest of the Directors and their close
families in the ordinary shares of one pence each in the Company at the date
of signing the accounts were as follows:
· Nick Hewson: 1,446,609 shares (0.12% of issued share capital)
· Jon Austen: 305,339 shares (0.02% of issued share capital)
· Vince Prior: 213,432 shares (0.02% of issued share capital)
· Cathryn Vanderspar: 125,802 shares (0.01% of issued share capital)
· Frances Davies: 36,774 shares (0.00% of issued share capital)
· Sapna Shah: 182,807 (0.01% of issued share capital)
· Roger Blundell: 100,000 shares (0.01% of issued share capital)
· Robert Abraham: 162,213 shares (0.01% of issued share capital)
· Michael Perkins: 14,911 shares (0.00% of issued share capital)
b. Investment Adviser
· Investment advisory and accounting fees
The investment adviser to the Group, Atrato Capital Limited (the "Investment
Adviser"), is entitled to certain advisory fees under the terms of the
Investment Advisory Agreement (the "Agreement") dated 14 July 2021. On the 25
March 2025 the Company announced the Internalisation of the management
function from which date Atrato Capital Limited no longer served as the
Investment Adviser.
The entitlement of the Investment Adviser to advisory fees was by way of what
are termed 'Monthly Management Fees' and 'Semi-Annual Management Fees' both of
which are calculated by reference to the net asset value of the Group at
particular dates, as adjusted for the financial impact of certain investment
events and after deducting any uninvested proceeds from share issues up to the
date of the calculation of the relevant fee (these adjusted amounts are
referred to as 'Adjusted Net Asset Value' for the purpose of calculation of
the fees in accordance with the Agreement).
Until the Adjusted Net Value of the Group exceeds £1,500 million, the
entitlements to advisory fees can be summarised as follows:
· Monthly Management Fee payable monthly in arrears: 1/12th of 0.7125% per
calendar month of Adjusted Net Asset Value up to or equal to £500 million,
1/12th of 0.5625% per calendar month of Adjusted Net Asset Value above £500
million and up to or equal to £1,000 million and 1/12(th) of 0.4875% per
calendar month of Adjusted Net Asset Value above £1,000 and up to or equal to
£1,500 million.
· Semi-Annual Management Fee payable semi-annually in arrears: 0.11875%
of Adjusted Net Asset Value up to or equal to £500 million, 0.09375% of
Adjusted Net Asset Value above £500 million and up to or equal to £1,000
million and 0.08125% of Adjusted Net Asset Value above £1,000 million and up
to or equal to £1,500 million.
During the period the Group agreed with the Investment Adviser to move the
basis of the management fee calculation from net asset value to market
capitalisation, effective from 1 July 2025. The current fee thresholds and
rates applied to the net asset value are retained in the new agreement. The
new agreement provides that 100% of the management fee will be paid monthly
such that there is no semi-annual management fee. Atrato Group was also to
provide the following services as part of the new agreements:
Service Fees per annum
Payment services £150,000
AIFM £135,000
Company Secretarial £250,000
Due to the internalisation Atrato Group did not provide the services or
receive fees in respect of AIFM and payment services.
For the period 1 July 2024 to 25 March 2025 the total fees payable to Atrato
Group were £27,593,032 (2024: £9,472,218) of which £nil (2024: £1,745,960)
is included in trade and other payables in the consolidated statement of
financial position as at 30 June 2025. £20,800,000 related to amounts payable
to Atrato Group for the Internalisation of the management function as follows:
· Termination of the Investment Advisory agreements - £19,700,000
· Termination of AIFM agreement - £300,000
· Transitional services - £800,000
The Investment Adviser was also entitled to an annual accounting and
administration service fee equal to: £54,107; plus (i) £4,386 for any
indirect subsidiary of the Company and (ii) £1,702 for each direct subsidiary
of the Company. A full list of the Company and its direct and indirect
subsidiary undertakings is listed in Note 15 of these financial statements.
For the period from 1 July 2024 to 25 March 2025 the total accounting and
administration service fee payable to the Investment Adviser was £250,353
(2024: £363,869) of which £88,801 (2024: £91,950) is included in trade and
other payables in the consolidated statement of financial position as at 30
June 2025.
For the period from 1 July 2024 to 25 March 2025 the total Company Secretarial
fees payable to the Investment Advisor were: £63,401 which was outstanding as
at the year end.
· Introducer Services
Atrato Partners, an affiliate of the Investment Adviser, was entitled to fees
in relation to the successful introduction of prospective investors in
connection with subscriptions for ordinary share capital in
the Company.
The entitlement of the Investment Adviser to introducer fees is by fees and/or
commission which can be summarised as follows:
· Commission basis: 1% of total subscription in respect of ordinary
shares subscribed for
by any prospective investor introduced by Atrato Partners.
For the period to 25 March 2025 the total introducer fees payable to the
affiliate of the Investment Adviser were £nil (2024: £nil).
Charitable donations
The Company approved a policy to make charitable donations of £150,000 per
annum. During the year £180,000 was approved by the Board and paid during the
year (2024: £120,000). The donations will be made to the Atrato Foundation, a
corporate charity registered with the Charity Commission and Companies House,
whose Trustees are Robert Abraham, Michael Carey (a Managing Director at
Atrato Group) and Natalie Markham (CFO at Atrato Group). The donations will be
made in the form of a restricted grant, the funds will be directed to
charitable causes specified by the Board of the Company. For further
information on the Company's charitable activities, please refer to page 11.
Joint Venture
On 16 May 2025, the Group entered into a joint venture agreement with Blue
Owl, for full details please see Note 16.
32. Subsequent events
In July 2025, the Group announced the acquisition of a Tesco store in Ashford
for a purchase price of £54.1 million (excluding acquisition costs) and a net
initial yield of 7.0%.
In July 2025, the Group completed its debut issuance of a £250 million
sterling-denominated senior unsecured bond with a term of 6 years. The bonds
bear a coupon on 5.125% and were priced at a spread of 115 basis points over
the relevant benchmark.
In August 2025, the Group completed the acquisition of a Waitrose in Anglesey,
Wales for a purchase price of £4.8 million (excluding acquisition costs) and
a net initial yield of 6.1%.
COMPANY STATEMENT OF FINANCIAL POSITION
As at 30 June 2025
Registered number: 10799126
Notes As at As at
30 June 2025 30 June 2024
£'000 £'000
Non-current assets
Investments in subsidiaries D 1,264,128 1,139,114
Intercompany receivables 669,239 491,566
Interest rate derivatives 3,133 14,312
Total non-current assets 1,936,500 1,644,992
Current assets
Interest rate derivatives 8,091 13,258
Trade and other receivables E 1,572 4,013
Cash and cash equivalents F 54,335 382
Total current assets 63,998 17,653
Total assets 2,000,498 1,662,645
Current liabilities
Trade and other payables G 391,194 227,194
Total current liabilities 391,194 227,194
Non-Current liabilities
Bank borrowings H 603,729 412,533
Total liabilities 994,923 639,727
Total net assets 1,005,575 1,022,918
Equity
Share capital I 12,462 12,462
Share premium reserve 500,386 500,386
Capital reduction reserve 553,113 629,196
Accumulated losses (60,386) (119,126)
Total equity 1,005,575 1,022,918
The notes on pages 148 to 150 form part of these financial statements.
The Company has taken advantage of the exemption within section 408 of the
Companies Act 2006 not to present its own profit and loss account. The profit
for the year dealt with the financial statements of the Company was
£58,740,000 (2024: loss £18,272,000). As at 30 June 2025 the Company has
distributable reserves of £493.0 million (2024: £510.0 million).
The Company financial statements were approved and authorised for issue by the
Board of Directors on 16 September 2025 and were signed on its behalf by
Nick Hewson
Chair
COMPANY STATEMENT OF CHANGES IN EQUITY
For the year ended 30 June 2025
Share capital £'000 Share premium reserve £'000 Capital reduction reserve £'000 Accumulated losses £'000 Total £'000
As at 1 July 2024 12,462 500,386 629,196 (119,126) 1,022,918
Profit and total comprehensive income for the year - - - 58,740 58,740
Transactions with owners
Interim dividends paid - - (76,083) - (76,083)
As at 30 June 2025 12,462 500,386 553,113 (60,386) 1,005,575
As at 1 July 2023 12,462 500,386 704,531 (100,854) 1,116,525
Loss and total comprehensive income for the year - - - (18,272) (18,272)
Transactions with owners
Interim dividends paid - - (75,335) - (75,335)
As at 30 June 2024 12,462 500,386 629,196 (119,126) 1,022,918
NOTES TO THE COMPANY FINANCIAL STATEMENTS
A. Basis of preparation
The Company's financial statements have been prepared in accordance with FRS
102, the Financial Reporting Standard applicable in the United Kingdom and the
Republic of Ireland.
The principal accounting policies relevant to the Company are as follows:
· Investments in subsidiaries are recognised at cost less provision for
any impairment
· Loans and receivables are recognised initially at fair value plus
transaction costs less provision for impairment
· Trade payables are recognised initially at fair value and subsequently
at amortised cost
· Equity instruments are recognised as the value of proceeds received net
of direct issue
costs
· Dividends are recognised as a financial liability and deduction from
equity in the period in which they are declared
In preparing the Company's financial statements, advantage has been taken of
the following disclosure exemptions available in FRS 102:
· No cash flow statement has been presented
· Disclosures in respect of the Company's financial instruments have not
been presented as equivalent disclosures have been provided in respect of the
Group
· No reconciliation of the number of shares outstanding at the beginning
and end of the year has been presented as it is identical to the
reconciliation for the Group shown in note 25
to the Group financial statements
· No disclosure has been given for the aggregate remuneration of the key
management personnel of the Company as their remuneration is shown in note 8
to the Group
financial statements
In the year to 30 June 2025, the Company intends to continue to use these
disclosure exemptions unless objections are received from Shareholders.
B. Significant accounting judgements, estimates and assumptions
In preparing the financial statements of the Company, the Directors have made
the following judgements:
· Determine whether there are any indicators of impairment of the
investments in subsidiary undertakings. Factors taken into consideration in
reaching such a decision include the financial position and expected future
performance of the subsidiary entity. Where indicators of impairment are
identified the carrying value of investments in subsidiaries will be compared
to their recoverable amount and an impairment charge recognised where this is
lower than carrying value. The net asset value of the individual subsidiary
entities is considered to be a reasonable proxy for fair value less costs to
sell as the underlying investment properties held within these entities is
carried at fair value.
C. Auditor's remuneration
The remuneration of the auditor in respect of the audit of the Company's
consolidated and individual financial statements for the year was £503,000
(2024: £292,150). Fees payable for audit and non-audit services provided to
the Company and the rest of the Group are disclosed in note 7 to the Group
financial statements.
D. Investment in subsidiary undertakings
The Company's wholly owned direct subsidiaries are:
· Supermarket Income Investments UK Limited
· Supermarket Income Investments (Midco2) UK Limited
· Supermarket Income Investments (Midco3) UK Limited
· Supermarket Income Investments (Midco4) UK Limited
· SII UK Halliwell (Midco) Limited
· Supermarket Income Investments UK (Midco 6) Limited
· Supermarket Income Investments UK (Midco7) Limited
· Supermarket Income Investments UK (Midco 8) Limited
· Supermarket Income Investments UK (Midco 9) Limited
· Supermarket Income Investments UK (Midco 10) Limited
· SUPR Finco Limited
· SUPR Green Energy Limited
· SUPR Management Limited
All of which are incorporated and operating in England with a registered
address of 3(rd) Floor, 10 Bishops Square, London E1 6EG, except for
Supermarket Income Investments UK (Midco 10) Limited which is incorporated in
Jersey. The full list of subsidiary entities directly and indirectly owned by
the Company is disclosed in note 15 to the Consolidated Financial Statements.
The movement in the year was as follows:
Year to
30 June 2025
£'000
Opening balance 1,139,114
Additions 182,216
Disposals (11,434)
Closing balance 1,309,896
Impairments of investments in subsidiaries (45,768)
As at 30 June 2025 1,264,128
Non-current Loans receivable 669,239
Closing balance as at 30 June 2025 1,933,367
During the year and prior year, a number of the Company's subsidiaries
undertook buybacks of their own shares. The proceeds of these buybacks were
left outstanding as intercompany loans provided by the Company to the
respective subsidiaries. These transactions are responsible for the increase
in the Company's intercompany loan receivable balance as at 30 June 2025.
Year to
30 June 2024
£'000
Opening balance 1,564,226
Additions 1
Disposals (359,865)
Closing balance 1,204,362
Impairments of investments in subsidiaries (65,248)
As at 30 June 2024 1,139,114
Non-current Loans receivable 491,566
Closing balance as at 30 June 2024 1,630,680
An impairment of investments in subsidiaries was recognised during both the
current and previous year following the payment of upstream dividends to the
Company. Following the payment of dividends, the net assets of certain
dividend paying subsidiaries no longer support the carrying value of the
Company's investment in those entities and thus an impairment charge was
recognised to bring the carrying value of the investments in line with the
recoverable amount, which was also considered to be its value in use.
E. Trade and other receivables As at As at
30 June 2025 30 June 2024
£'000 £'000
Intercompany receivables 568 3,645
Prepayments and accrued income 246 209
VAT receivable 758 159
Total trade and other receivables 1,572 4,013
As at As at
30 June 2025 30 June 2024
F. Cash and cash equivalent £'000 £'000
Cash and cash equivalents 54,335 382
Total cash and cash equivalent 54,335 382
Included in cash and cash equivalents is an amount of £54.1 million (2024:
£nil) held in a client account by external legal counsel in advance of a
potential acquisition.
As at As at
30 June 2025 30 June 2024
G. Trade and other payables £'000 £'000
Trade creditors 356 2,120
Corporate accruals 10,949 6,491
Intercompany payables 379,889 218,583
Total trade and other payables 391,194 227,194
H. Bank Borrowings
As at As at
30 June 2025 £'000 30 June 2024
£'000
Amounts falling due after more than one year:
Unsecured debt 606,986 414,981
Less: Unamortised finance costs (3,257) (2,448)
Bank borrowings per the Company's statement of financial position 603,729 412,533
Total bank borrowings 603,729 412,533
Any associated fees in arranging the bank borrowings that are unamortised as
at the end of the year are offset against amounts drawn under the facility as
shown in the table above.
Details of the bank borrowings of the Company are disclosed in note 22 to the
Group financial statements.
I. Share capital
Details of the share capital of the Company are disclosed in note 25 to the
Group financial statements.
J. Related party transactions
Details of related party transactions are disclosed in note 31 to the Group
financial statements.
UNAUDITED SUPPLEMENTARY INFORMATION
Notes to EPRA and other Key Performance Indicators
1. EPRA Earnings per Share
For the period from 1 July 2024 to 30 June 2025 Net profit attributable Weighted average number of ordinary shares(1) Earnings/
to ordinary Shareholders
Number per share
£'000
Pence
Net profit attributable to ordinary Shareholders 61,528 1,246,239,185 4.9
Adjustments to remove:
Changes in fair value of investment properties and associated rent guarantees (28,001) - (2.2)
Loss on disposal of investment properties 1,327 - 0.1
Changes in fair value of interest rate derivatives measured at FVTPL 18,842 - 1.5
Group share of changes in fair value of joint venture investment properties (468) - (0.0)
Deferred Tax (871) - (0.1)
Non-operating and exceptional items:
Termination fee 20,800 - 1.7
Internalisation costs 634 - 0.1
Restructuring costs in relation to the acceleration of 236 - 0.0
. unamortised arrangement fees
Fees for listing on JSE 192 - 0.0
EPRA earnings (Basic) 74,219 1,246,239,185 6.0
EPRA earnings (Diluted) 74,219 1,246,328,616 6.0
1 Based on the weighted average number of ordinary shares in issue in the
year ended 30 June 2025 both basic and diluted. Dilutive instruments are in
relation to the expected shares to vest as at the period end under the LTIP.
For the period from 1 July 2023 to 30 June 2024 Net loss attributable Weighted average number of ordinary shares(2) Earnings/
to ordinary Shareholders
Number per share
£'000
Pence
Net loss attributable to ordinary Shareholders (21,184) 1,246,239,185 (1.7)
Adjustments to remove:
Changes in fair value of investment properties and associated rent guarantees 65,825 - 5.3
Changes in fair value of interest rate derivatives measured at FVTPL 31,251 - 2.5
Deferred Tax (140) - -
Non-cash write down of loan arrangement fees in respect of loan restructuring 70 - -
EPRA earnings 75,822 1,246,239,185 6.1
2 Based on the weighted average number of ordinary shares in issue in the
year ended 30 June 2024.
2. EPRA NTA per share
EPRA NTA is considered to be the most relevant measure for the Group and is
now the primary measure of net assets, replacing the previously reported EPRA
Net Asset Value metric. For the current period EPRA NTA is calculated as net
assets per the consolidated statement of financial position excluding the fair
value of interest rate derivatives.
30 June 2025 EPRA NTA EPRA NRV EPRA NDV £'000
£'000 £'000
IFRS NAV attributable to ordinary Shareholders 1,103,252 1,103,252 1,103,252
Fair value of Financial asset held at amortised cost (3,955) (3,955) (3,955)
Fair value of interest rate derivatives (11,224) (11,224) -
Purchasers' costs - 110,531 -
Fair value of debt - - (799)
EPRA metric 1,088,073 1,198,604 1,098,498
Diluted Shares 1,248,570,767
EPRA metric per share 87.1p 96.0p 88.0p
30 June 2024 EPRA NTA EPRA NRV EPRA NDV £'000
£'000 £'000
IFRS NAV attributable to ordinary Shareholders 1,119,474 1,119,474 1,119,474
Fair value of interest rate derivatives (31,449) (31,449) -
Fair value of Financial asset held at amortised cost (3,493) (3,493) (3,493)
Purchasers' costs - 120,239 -
Fair value of debt - - 149
EPRA metric 1,084,532 1,204,771 1,116,130
EPRA metric per share 87.0p 96.7p 89.6p
3. EPRA Net Initial Yield (NIY) and EPRA "topped up" NIY
As at As at
30 June 2025 £'000 30 June 2024 £'000
Investment Property - wholly owned (note 14) 1,415,819 1,768,216
Investment Property - share of joint ventures 202,350 -
Completed Property Portfolio 1,618,169 1,768,216
Allowance for estimated purchasers' costs 110,531 120,239
Grossed up completed property portfolio valuation (B) 1,728,700 1,888,455
Annualised passing rental income - wholly owned 87,629 112,338
Annualised passing rental income - Share of joint venture 14,613 -
Annualised non-recoverable property outgoings (1,621) (1,116)
Annualised net rents (A) 100,621 111,222
Rent expiration of rent-free periods and fixed uplifts 433 440
Topped up annualised net rents (C) 101,054 111,662
EPRA NIY (A/B) 5.82% 5.89%
EPRA "topped up" NIY (C/B) 5.85% 5.91%
All rent free periods expire within the year to 30 June 2025
4. EPRA Vacancy Rate
EPRA Vacancy Rate As at As at
30 June 2025 £'000 30 June 2024 £'000
Estimated rental value of vacant space 331 591
Estimated rental value of the whole portfolio 103,006 113,660
EPRA Vacancy Rate 0.3% 0.5%
The EPRA vacancy rate is calculated as the ERV of the unrented, lettable space
as a proportion of the total rental value of the direct Investment Property
portfolio. This is expected to continue to be a highly immaterial percentage
as the majority of the portfolio is let to the largest supermarket operators
in the UK.
5. EPRA Cost Ratio
As at As at
30 June 2025 £'000 30 June 2024 £'000
Administration expenses per IFRS 14,469 15,218
Service charge income (9,044) (6,822)
Service charge costs 9,819 7,441
Net Service charge costs 775 619
Share of joint venture expenses 130 -
Less:
Management fees (305) -
Total costs (including direct vacant property costs) (A) 15,069 15,837
Vacant property costs (744) (331)
Total costs (excluding direct vacant property costs) (B) 14,325 15,506
Gross rental income per IFRS 114,009 107,851
Less: service charge components of gross rental income -
Add: Share of Gross rental income from Joint Ventures 1,799 -
Gross rental income (C) 115,808 107,851
EPRA Cost ratio (including direct vacant property costs) (A/C) 13.0% 14.7%
EPRA Cost ratio (excluding vacant property costs) (B/C) 12.4% 14.4%
1. The Company does not have any overhead costs capitalised as it has no
assets under development.
6. EPRA LTV
As at As at
30 June 2025 30 June 2024
£'000 £'000
Group Net Debt
Borrowings from financial institutions 603,602 694,168
Net payables - 34,832
Less: Cash and cash equivalents (95,281) (38,691)
Group Net Debt Total (A) 508,321 690,309
Group Property Value
Investment properties at fair value 1,415,819 1,768,216
Intangibles - -
Net receivables 77,367 -
Financial assets 11,235 11,023
Total Group Property Value (B) 1,504,421 1,779,239
Group LTV (A/B) 33.79% 38.80%
Share of Joint Ventures Debt
Bond loans - -
Net payables 113,585 -
Less: Cash and cash equivalents (5,655) -
JV Net Debt Total (A) 107,930 -
Group Property Value
Owner-occupied property
Investment properties at fair value 202,350 -
Total JV Property Value (B) 202,350 -
JV LTV (A/B) 53.34% 0.00%
Combined Net Debt (A) 616,251 690,309
Combined Property Value (B) 1,706,771 1,779,239
Combined LTV (A/B) 36.11% 38.80%
7. EPRA Like-for-Like Rental Growth
Year ended 30 June 2025 Year ended 30 June 2024 Like-for-Like rental growth
£'000 £'000 %
Like for like - net rental income 83,284 81,369 2.4%
Properties acquired 9,779 1,565
Properties sold 20,171 23,855
Net rental income before surrender premium 113,234 106,789
Surrender premiums - 443
Net rental income 113,234 107,232 5.6%
The like-for-like rental growth is based on changes in net rental income for
those properties which have been held for the duration of both the current and
comparative reporting. This represents a portfolio valuation, as assessed by
the valuer of £1.31 billion (30 June 2024: £1.30 billion).
8. EPRA Property Related Capital Expenditure
As at As at
30 June 2025 30 June 2024
£'000 £'000
Group
Acquisitions 81,785 145,834
Development 365 380
Investment properties - -
Group Total CapEx 82,150 146,214
Joint Venture
Acquisitions - -
Development - -
Investment properties - -
Joint Venture CapEx - -
Total CapEx 82,150 146,214
Acquisitions relate to purchase of investment properties in the year and
includes capitalised acquisition costs. Development relates to capitalised
costs in relation to development expenditure on the property portfolio.
9. Total Shareholder Return
Total Shareholder Return Average Net Return at end of the year (Pence) Average net return at start of the year Movement Total Shareholder Return
(Pence) (Pence) %
30 June 2025 133.72 107.86 25.86 24.0%
30 June 2024 107.86 106.01 1.85 1.8%
10. Net loan to value ratio
The proportion of our gross asset value that is funded by borrowings
calculated as statement of financial position borrowings less cash balances
divided by total investment properties valuation including share of Joint
Venture.
Net loan to value As at As at
30 June 2025 £'000 30 June 2024 £'000
Bank borrowings 603,602 694,168
Less cash and cash equivalents (100,936) (38,691)
Net borrowings 502,666 655,477
Investment properties valuation 1,625,449 1,768,216
Net loan to value ratio 31% 37%
11. Annualised passing rent
Annualised passing rent is the annualised cash rental income being received as
at the stated date.
GLOSSARY
Annual General Meeting
AGM
AIFMD Alternative Investment Fund Managers Directive
AIFM Alternative Investment Fund Manager
ALSI FTSE/JSE All Share Index
ALPI FTSE/JSE All Property Index
EPRA European Public Real Estate Association
EPS Earnings per share, calculated as the profit for the period after tax
attributable to members of the parent company divided by the weighted average
number of shares in issue in the period
ERV Estimated Rental Value
ESG Environmental, Social and Governance
EV Electric Vehicle
Blue Owl Funds managed by Blue Owl Capital
FCA Financial Conduct Authority of the United Kingdom
FRI A lease granted on an FRI basis means that all repairing and insuring
obligations are imposed on the tenant, relieving the landlord from all
liability for the cost of insurance and repairs
FVTPL Fair Value Through Profit and Loss
IAS International Accounting Standards
IFRS UK adopted international accounting standards
IGD Institute of Grocery Distribution
Internalisation The Company's transition from external management to internal management that
took effect on 25 March 2025
Investment Adviser Atrato Capital Limited was the Company's Investment Adviser until 25 March
2025
IPO An initial public offering refers to the process of offering shares of a
corporation to the public in a new stock issuance
JSE Johannesburg Stock Exchange
JV A strategic joint venture entered into with Blue Owl in April 2025
LSE London Stock Exchange
LTV Loan to value is the outstanding amount of a loan as a percentage of property
value
NAV Net asset value
NER Net effective rent
Net Initial Yield or NIY Annualised net rents on investment properties as a percentage of the
investment property valuation, less assumed purchaser's costs of 6.8%
Net Loan to Value or Net LTV LTV calculated on the gross loan amount less cash balances
NTA Net tangible assets
JV Joint venture
Omnichannel Stores offering both instore shopping and online fulfilment
Portfolio Directly owned properties and share of joint ventures
REIT Real Estate Investment Trust
Running yield The anticipated Net Initial Yield at a future date, taking account of any rent
reviews in the intervening period
sBPR EPRA Sustainability Best Practices Recommendations
Total Accounting Return or TAR The movement in EPRA Net Tangible Assets per share over a period plus
dividends declared for the same period, expressed as a percentage of the EPRA
Net Tangible Assets at the start of the period
Total Shareholder Return or TSR The movement in share price over the period plus dividends reinvested in
shares on the ex-dividend date, expressed as a percentage of the share price
at the start of the period.
WAULT Weighted Average Unexpired Lease Term. It is used by property companies as an
indicator of the average remaining life of the leases within their portfolio
The Company has a primary listing on the LSE and a secondary listing on the
Main Board of the JSE.
CONTACT INFORMATION
Directors Nick Hewson (Independent Non-Executive Chair)
Robert Abraham (Chief Executive Officer)
Mike Perkins (Chief Financial Officer)
Sapna Shah (Senior Independent Director)
Jon Austen (Independent Non-Executive Director)
Roger Blundell (Independent Non-Executive Director)
Frances Davies (Independent Non-Executive Director)
Vince Prior (Independent Non-Executive Director)
Cathryn Vanderspar (Independent Non-Executive Director)
Company Secretary Hafren Advisory Limited
3(rd) Floor, 10 Bishops Square
London
E1 6EG
Registrar MUFG Corporate Markets
19(th) Floor, 51 Lime Street
London
EC3M 7DQ
Financial Adviser and Joint Corporate Broker Stifel Nicolaus Europe
150 Cheapside
London
EC2V 6ET
Joint Corporate Broker Goldman Sachs International
Plumtree Court
25 Shoe Lane
London
EC4A 4AU
Auditors BDO LLP
55 Baker Street
London
W1U 7EU
Property Valuers (Direct Portfolio) Cushman & Wakefield
125 Old Broad Street
London
EC2N 1AR
Property Valuers (Joint Venture) Jones Lang LaSalle
30 Warwick Street
London
W1B 5NH
Financial PR Advisers FTI
200 Aldersgate Street
London
EC1A 4HD
Website www.supermarketincomereit.com (https://www.supermarketincomereit.com)
Registered Office 3(rd) Floor, 10 Bishops Square
London
E1 6EG
London Stock exchange ticker SUPR
Johannesburg Stock Exchange ticker SRI
ISIN GB00BF345X11
Supermarket Income REIT plc
3(rd) Floor, 10 Bishops Square
London
E1 6EG
1 (#_ftnref1) The alternative performance measures used by the Group have
been defined and reconciled to the IFRS financial statements within the
unaudited supplementary information
2 (#_ftnref2) Including share of joint venture portfolio
3 (#_ftnref3) Calculated as EPRA earnings divided by dividends paid in the
year
4 (#_ftnref4) Subject to rounding
5 (#_ftnref5) NIY achieved on transaction costs of 2.3% due to the
acquisition of a corporate entity
6 (#_ftnref6) Includes one store for which the Company signed a conditional
purchase agreement
7 (#_ftnref7) NIY achieved on transaction costs of 2.7% due to the
acquisition of a corporate entity
8 (#_ftnref8) NIY based on standard purchaser's costs in Wales
9 (#_ftnref9) Kantar grocery year on year grocery sales for the four weeks
to 13 July 2025
10 (#_ftnref10) IGD UK Grocery Market Value forecasts
11 (#_ftnref11) Kantar - Grocery Market Share Data as at 13 July 2025
12 (#_ftnref12) IGD France Grocery Market Value forecasts
13 (#_ftnref13) Including realised and unrealised gains
14 (#_ftnref14) Excluding acquisition costs and including an additional
store which was acquired by the Company post-period end due to a conditional
purchase agreement
15 (#_ftnref15) Excluding costs associated with disposals
16 (#_ftnref16) Book value as at 30 June 2024
17 (#_ftnref17) Value as at 31 December 2024
18 (#_ftnref18) Including assets managed on behalf of the joint venture and
a store for which the Company signed a conditional purchase agreement
19 (#_ftnref19) Assuming standard purchaser costs of 6.8%
20 (#_ftnref20) The calculation of Total Shareholder Return has been amended
in the current year. As such, the comparative period calculation in the table
has been adjusted to reflect the new calculation.
21 (#_ftnref21) Based on recent company accounts where disclosed. Peer group
based on FTSE-350 REITs, excluding operating companies and those that have
undergone recent corporate takeovers
22 (#_ftnref22) Excludes leases where passing rent is <0.3% of annual
rent roll
23 (#_ftnref23) Based on Company research
24 (#_ftnref24) Includes a store for which the Company signed a conditional
purchase agreement
25 (#_ftnref25) Subject to rounding
26 (#_ftnref26) Excluding acquisition costs
27 (#_ftnref27) 11-year WAULT at acquisition in November 2024
28 (#_ftnref28) Purchase price includes an additional store which was
acquired by the Company post-period end due to a conditional purchase
agreement
29 (#_ftnref29) Consists of UK 7.6% NIY and EUR 6.8% NIY
30 (#_ftnref30) Total may not sum due to rounding
31 (#_ftnref31) Number of supermarkets not including one for which the
Company acquired post-period end
32 (#_ftnref32) NEY ("Net Equivalent Yield") is the time weighted average
return that a property will produce
33 (#_ftnref33) The properties were valued individually without any
premium/discount applying to the Portfolio as a whole
34 (#_ftnref34) Including a 50% interest in the Joint Venture (£202.4
million)
35 (#_ftnref35) Includes realised and unrealised gains
36 (#_ftnref36) IGD UK Grocery Market forecast
37 (#_ftnref37) Subject to rounding
38 (#_ftnref38) By value
39 (#_ftnref39) Tesco's FY25 annual results, like-for-like UK food sales
40 (#_ftnref40) Sainsbury's FY25 annual results, grocery sales
41 (#_ftnref41) Source: IGD
42 (#_ftnref42) Kantar UK Grocery Market data
43 (#_ftnref43) Source: Kantar
44 (#_ftnref44) Source: IGD UK channel data 2019 and 2024
45 (#_ftnref45) Source: IGD. UK Grocery Market
46 (#_ftnref46) Tesco FY25 Annual Results
47 (#_ftnref47) Sainsbury's First Quarter Trading Statement for the 16 weeks
to 21 June 2025
48 (#_ftnref48) Kantar UK Grocery Market Share (12 weeks ending June 2025)
49 (#_ftnref49) Kantar UK Grocery Market Share (June 2024 to June 2025)
50 (#_ftnref50) Source: IGD, including convenience stores
51 (#_ftnref51) Source: IGD:
52 (#_ftnref52) Morrisons Full Year 2023/24 Results
53 (#_ftnref53) Morrisons Second Quarter Trading Update for the 13 weeks to
27 April 2025
54 (#_ftnref54) Source: IGD
55 (#_ftnref55) "Carrefour 2026" Strategic Plan
56 (#_ftnref56) Years ending 30 June, Source: Knight Frank, Savills, MSCI,
operator announcements and Company research
57 (#_ftnref57) FERA emissions includes the well-to-tank (WTT) and
transmission and distribution (T&D) upstream emissions from Scope 1 and 2
58 (#_ftnref58) Emissions not calculated in FY23 and FY24 due to lack of
data and immateriality (<1% of total emissions)
59 (#_ftnref59) Values have been rounded
60 (#_ftnref60) Business travel including air, rail and hotel stays that are
not included in the mandatory business travel emissions
61 (#_ftnref61) Emissions in downstream leased assets includes emission from
tenant electricity, fuel and refrigerant consumption. FERA emissions
associated with leased assets are included in Scope 3: Downstream Leased
Assets
62 (#_ftnref62) Values have been rounded
63 (#_ftnref63) Tenant energy consumption from fuels and electricity only
64 (#_ftnref64) Normalised to Scope 1 + 2 floor area: 347,714 m2 FY24
65 (#_ftnref65) Normalised to Scope 1, 2 + 3 floor area: 1,003,435 m2 FY24
66 (#_ftnref66) "Recommendations of the Task Force on Climate-related
Financial Disclosures" published in June 2017 by the Task Force on
Climate-related Financial Disclosures, available at: https://www.fsb-tcfd.org
(https://www.fsb-tcfd.org./)
67 (#_ftnref67) Physical CVaR is defined as the net present value of the
future costs attached to physical risk (cost of damage due to extreme
weather), expressed as a % of the asset's Capital Value. Calculated for a
given carbon emissions reduction scenario or climate change scenario, with a
given scenario outcome (aggressive or average) in case of physical risk.
Discount rate of 7.4% rate (average long-term total return of MSCI Global
Property Index)
68 (#_ftnref68) Financial Risk Categories include: Severe Risk
(CVaR<-25%), Significant Risk (CVaR<-5%), Moderate Risk (CVaR<-0.5%),
Negligible Risk (CVaR<0%), No Identifiable Risk (CVaR=0%), Negligible Risk
Reduction (CVaR>0%), Risk Reduction (CVaR>0.5%)
69 (#_ftnref69) The exposure assessment adopted the CVaR financial risk
thresholds of negligible, moderate, significant and severe risk, with severe
the highest financial risk category
70 (#_ftnref70) 3°C | REMIND | Current Policies (default) by 2100 time
horizon. The Aggressive Outcome reflects the severe downside physical risk of
a given climate change scenario and is computed from the 95th percentile of
the distribution of Discounted Costs reflecting uncertainty about the climate
system and modelling assumptions. The 3°C (Current Policies) scenario with
Aggressive Outcome (or worst case/95th percentile) was selected to better
stress test the Company's strategy as physical risks are highest under this
scenario (compared to other two scenarios reviewed by the Company)
71 (#_ftnref71) The exposure assessment adopted the CVaR financial risk
thresholds of negligible, moderate, significant and severe risk, with severe
the highest financial risk category. Percentages are calculated by asset count
(UK portfolio) rather than capital value
72 (#_ftnref72) Change primarily a result of the MSCI Tool Fathom model
update which reports "defended" flood depths so only water exceeding the flood
protection can cause flooding
73 (#_ftnref73) Percentages are calculated by asset count (France portfolio)
rather than capital value
74 (#_ftnref74) By valuation as at 30 June 2025. Based on 160 buildings with
EPC Ratings Certifications, excluding non-English and residential EPCs
75 (#_ftnref75) The nature of FRI leases means the tenants have
responsibility for the maintenance and operation of the assets (including the
heating and cooling of the building) during the term of the lease
76 (#_ftnref76) Only the Company's English EPCs included (due different
methodology for Scottish and France EPCs). 84% of the Company's UK supermarket
EPCs are C and above
77 (#_ftnref77) FY24: UK supermarket assets only. From FY25 all supermarket
assets screened.
78 (#_ftnref78) FY25: UK and France. FY23 and FY24 UK only
79 (#_ftnref79) FY25: UK and France. FY23 and FY24 UK only
80 (#_ftnref80) FERA emissions associated with tenant activities under Scope
3 downstream leased assets are not included in the figures reported
81 (#_ftnref81) Resolution for all hazards: 23 m x 30 m
82 (#_ftnref82) Includes one store for which the Company had signed a
conditional purchase to buy and which completed post year end.
83 (#_ftnref83) Includes one store for which the Company had signed a
conditional purchase to buy and which completed post year end.
84 (#_ftnref84) The Directors have identified certain measures that they
believe will assist the understanding of the performance of the business. The
measures are not defined under IFRS and they may not be directly comparable
with other companies' adjusted measures. The non-GAAP measures are not
intended to be a substitute for, or superior to, any IFRS measures of
performance, but they have been included as the Directors consider them to be
important comparable and key measures used within the business for assessing
performance. The key non-GAAP measures identified by the Group have been
defined in the supplementary information and, where appropriate,
reconciliation to the nearest IFRS measure has been given.
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