Supermarket Income REIT provides Shareholders with an attractive level of income together with the potential for capital growth by investing in supermarket real estate assets
As a responsible business, we seek to minimise the impact that our properties have on the local and wider environment. Our aim is to be a market leader in sustainability and to meet our stakeholder’s expectations of sustainable investment.
Our tenants have ambitious ESG targets that are well ahead of the UK’s net zero carbon timetable.
When acquiring an asset we consider both the existing environmental performance of the property and, more importantly, the potential positive impact we can have in achieving carbon reduction onsite via the installation of renewable energy infrastructure. Our key asset management strategy is to work with our tenants to facilitate the installation of clean energy generation infrastructure such as rooftop solar photovoltaic arrays (PV systems).
Supermarket real estate is ideally positioned for PV system installation for three reasons:
Demand - The grocery sector is one of the largest users of electricity in the UK, accounting for c5% of the UK’s total electricity consumption. Our tenants are actively looking for opportunities to reduce energy usage and its associated costs to meet their own ambitious ESG targets. (1)
Lease fundamentals - Supermarket real estate is characterised by long leases with no option to break. This helps to facilitate the adoption of long-term Power Purchase Agreements (PPAs). A PPA provides tenants with a long-term supply of clean energy at an agreed price and offers SUPR as landlord an additional long term predictable income stream underpinned by the very same grocery tenant covenants.
Design - Supermarkets are large buildings which usually have extensive flat roofs that are therefore optimal for both solar installation and generation.
We are currently developing a 370kW rooftop solar PV system at our Tesco store in Thetford. This will provide an estimated 85,000kg of CO2 savings per annum for Tesco.
Thetford Tesco. For illustrative purposes only
Our ambition is to install PV systems across the majority of our portfolio. We have begun a development programme for the next phase of renewable energy installations. This includes deployment of solar PV systems across five further supermarket stores in the UK.
Third party owned stores
Having developed the expertise to install renewable infrastructure across our portfolio, we are in a unique position to deploy capital in the development of solar arrays on supermarkets owned by third parties (including the operators’ freehold asset base), and the supermarket supply chain. This initiative would support both SUPR and its tenants in furthering their ambitious ESG objectives.
(2) Evo Energy Estimates