A key prediction from the Supermarket REIT team has come to fruition - that Tesco would regain its investment grade rating in the near term. This week Standard & Poor upgraded Tesco to BBB- with stable outlook, having been the the last of the major credit ratings agencies not to have upgraded the grocer.
In June this year Moody's upgraded Tesco to Baa3 citing improvement in profit, reduction in debt and clear market leadership alongside international presence. Fitch had been the first to make the upgrade having assigned a BBB- rating in October 2018.
As the dominant operator of UK grocery stores, the investment grade rating could drive a potential yield shift in omnichannel property. We love it when a plan comes together.