Jefferies Upgrades Supermarket Income REIT to Buy After Strong Operational Update

Supermarket Income REIT (SIT.L) has drawn positive attention from Jefferies, which upgraded the stock to 'Buy' after the company delivered a solid update highlighting consistent financial performance. The REIT, which owns a portfolio of supermarket-anchored retail properties across the UK, reported full-year 2025 results showing an 8.3% increase in underlying rental income, driven by contractual escalations and low tenant turnover. The update also revealed a 97.5% occupancy rate across its core portfolio of 132 properties, with no material lease expirations expected until 2027. The upgrade underscores Jefferies' view that Supermarket Income REIT is well-positioned to deliver stable, inflation-linked cash flows. The firm noted that 94% of the REIT’s income is derived from contracts with major supermarket chains, including Tesco, Sainsbury’s, and Asda, all of which have continued to renew leases at favorable terms. The REIT’s net initial yield of 5.6% and a dividend cover of 1.8x further support its defensive profile in a volatile macro environment. Market reaction has been positive, with SIT.L shares rising 3.2% in early trading on the London Stock Exchange, outperforming the broader FTSE All-Share index (^FTSE), which gained 0.5%. The move also lifts the stock’s relative performance against other UK retail REITs, such as Legal & General and British Land, which have seen more muted returns over the same period.