(Alliance News) - Supermarket Income REIT PLC on Thursday said its direct portfolio has been independently revalued at GBP1.63 billion at December 31, down 13% over the past six months.
The London-based real estate investment trust dedicated to investing in grocery properties said the valuation reflects a net initial yield of 5.5% at December 31, compared to 4.6% a June 30 last year.
The trust said the reduction in value was a result of the outward shift of property yields by valuers, due to higher interest rates as well as the wider macroeconomic environment.
Supermarket income noted that the valuation decline was offset by its contractual inflation-linked rental uplifts. The average rent increase during the six months to December 31 was 3.7%.
Ben Green, director of Atrato Capital Limited, the investment adviser to Supermarket Income said: "Supermarket property has been less volatile than the broader UK property market but has not been immune to the outward yield shift experienced across investment markets.
"We have the advantage of operating in the non-discretionary spend grocery sector, which continues to outperform the wider economy. Our high quality, future-proof, omnichannel supermarket property portfolio will continue to deliver stable, long term, inflation-linked income for our shareholders."
The company announces its interim results for the first half to December 31 on March 30.
Supermarket Income shares were down 2.6% trading at 92.34 pence per share on Thursday afternoon in London.
By Harvey Dorset, Alliance News reporter
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Supermarket Income (SUPR)