With heavy debt burdens weighing on investor sentiment, many REITs have seen their share prices collapse since 2022. But more recently, the higher quality companies in this sector have started showing early signs of recovery. Some of these businesses have even been boosting shareholder payouts, resulting in impressive yields.

Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice.

Accelerating growth

Among the list of REITs still expanding dividends stands Supermarket Income REIT (LSE:SUPR). It’s currently the only pure-play in the grocery commercial property sector, and acts as the landlord to most of Britain’s largest supermarket giants, including Tesco, Sainsbury’s, Morrisons, and Asda.

The exclusive focus on grocery retail has proven to be quite advantageous. While higher interest rates have certainly created a few headaches for this leveraged landlord, the UK grocery market has been exceptionally resilient throughout the cost-of-living crisis. And for Supermarket Income REIT, that’s translated into reliable and predictable rental cash flows with leases spanning an average of 12 years.

What’s more, with around 82% of the firm’s leases linked to inflation and a series of successful rent reviews executed in the second half of 2025, annualised rental income has seen a welcome 11% bump from £118.5m to £132m.

Yet with another £398m of capital deployed through acquisitions, this growth appears to be on track to accelerate, paving the way to even more impressive cash flows, dividends, and debt reduction over the coming years.

So is this a no-brainer?

Where is the risk?

At a share price of 85p and a dividend per share of 6.15p, investors have the opportunity to lock in an impressive 7.24% yield. That means a £10,000 investment today not only snaps up 11,764 shares, but also unlocks a £724 passive income in the process.

But if rental revenues are set to expand, why is the yield still so high? There are two primary concerns surrounding this business.

The first is the fear that a prolonged conflict in the Middle East will trigger a new wave of energy inflation, delaying interest rate cuts, and directly putting pressure on Supermarket Income REIT’s balance sheet. The second is the fact that earnings simply don’t cover shareholder payouts right now.

With a loan-to-value ratio of 43% as of this month, a significant chunk of the group’s rental income is being gobbled up by interest, resulting in a payout ratio that exceeds 100%.

Obviously, that isn’t sustainable in the long run. But management doesn’t appear concerned, projecting that the expected future profits from its recent property acquisitions will help close this gap.

So where does that leave investors?

The bottom line

If management’s correct, an incoming surge in earnings will flip the script and see a return of cash-covered dividends. But if this growth fails to materialise, shareholders’ payouts could eventually be put up on the chopping block.

So is that a risk worth taking? It might be.

Given the firm’s strong dividend track record so far, and management’s seemingly prudent approach toward capital allocation, Supermarket Income REIT could indeed be an income opportunity worth exploring further. And it’s not the only dividend stock on my radar this week.

The post £10,000 buys 11,764 shares of this REIT, unlocking £723.49 in passive income appeared first on The Motley Fool UK.

Let’s consider both sides of the argument by looking at one particular high-yielding example that today (11 March) has released its results for the six months ended 31 December 2025.

Bricks and mortar

Supermarket Income REIT (LSE:SUPR), which owns a portfolio of freehold and leasehold grocery stores in the UK and France valued at £2.06bn, has paid dividends of 6.15p a share over the past 12 months. With a current share price of 82.1p, it means the stock’s yielding an incredible 7.5%.

But things get better. Its payout’s been increased every year since it listed in July 2017. This impressive record is partly due to the fact that — in common with all REITs — it has to return at least 90% of its rental profit to shareholders each year by way of dividends.

However, the trust still has to be profitable for it to be in a position to reward shareholders. After all, 90% of nothing is nil.

Importantly, the trust’s able to target paying a progressive dividend because its income is secured via long-term inflation-linked leases. And because of the calibre of its tenants – Tesco and Sainsbury’s to name just two – it has full occupancy and no bad debts.

Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice.

Adapt and survive

I particularly like Supermarket Income because large supermarkets have evolved over the years to become the hub of the grocery market. With more people shopping online, many started to believe that the industry would transition towards centralised distribution centres. However, large grocers have successfully adapted to this challenge.

Whether someone wants to visit a store, have their groceries delivered, or go and collect what they’ve bought online, the omnichannel supermarket remains essential. I don’t think it’s a coincidence that Ocado Group’s now planning to close some of its customer fulfilment centres.

In my opinion, these qualities make Supermarket Income a great defensive stock. Both the REIT business model — and the grocery sector — can be attractive during times of market volatility. That’s why I have shares in the REIT and why I think others could consider adding some to their own portfolios.

No regrets

However, some are wary of REITs because they, generally speaking, tend to have large borrowings. That’s because most use debt to expand. At 31 December 2025, Supermarket Income’s balance sheet disclosed borrowings of £980m. This gives it a loan-to-value (LTV) of 43%, taking into account some 2026 transactions. Higher interest rates will lead to increased borrowing costs and reduced earnings.

Others investors don’t like the cyclical nature of the commercial property market, particularly in the UK. If supermarket real estate values were to fall, the trust’s net asset value would tumble and its LTV rise. This could limit its future borrowing capacity.

But I still rate Supermarket Income. Compared to the same period a year ago, its latest results show an 11% increase in rental income and a 0.1% improvement in portfolio yield. The group’s targeting a 2% increase in its annual dividend from its next financial year onwards. That’s why I’m happy with my choice of REIT.

The post With an astonishing 7.5% yield, is this ‘defensive’ REIT worth buying today? appeared first on The Motley Fool UK.

One method is to compare dividend yields. However, an above-average return can be a sign that investors are expecting a cut in a company’s payout.

Could this be the case with these three high-yielding shares that I’ve identified, or are they a great opportunity to start generating a healthy second income stream? Let’s see.

1. Legal & General

My favourite income share at the moment is Legal & General (LSE:LGEN). The FTSE 100 retirement and savings group is presently (27 February) offering a return of 8%, the highest on the index. This assumes the group keeps its pledge to increase its 2025 payout by 2%.

Some of this impressive yield can be attributed to a falling share price. Even so, the stock has a solid track record of raising its dividend. It was last cut during the global financial crisis. And it plans annual rises of 2% up until 2027.

Threats to its earnings (and therefore its dividend) include increased competition and global market uncertainty. The group invests heavily and equities and bonds. A stock market correction, or worse, would be bad news.

However, the group has a huge pipeline of pension schemes that it’s looking to take over and manage. Also, with the State Pension age predicted to rise further, I think more people will turn to third-party providers to look after retirement planning.

2. Land Securities Group

Another stock I like is Land Securities Group (LSE:LAND). It has a £10.8bn portfolio of mainly offices, stores, and retail parks.

Again, its yield has increased more due to its falling share price than a rising payout. Having said that, it’s gone up 9.2% over its past three financial years. Based on amounts paid since February 2025 (40.8p), the stock’s yielding 6.2%.

However, it has to be pointed out that future increases might not be possible due to the volatile nature of the commercial property sector. And with substantial borrowings, if interest rates were to stay higher for longer, this is likely to impact earnings.

But the group’s planning to sell some of its offices to fund an expansion into the residential sector. These are expected to offer a better return. It can also boast of a high occupancy rate, thanks largely to the quality of its portfolio.

3. Supermarket Income REIT

Like Land Securities Group, Supermarket Income REIT (LSE:SUPR) is a real estate investment trust (REIT). This means it must return at least 90% of its qualifying profit each year to shareholders by way of dividends. At the moment, the stock’s yielding 7%.

Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice.

The REIT buys supermarkets in the UK and France and then rents them to blue-chip grocers. Positively, the quality of its tenants means it doesn’t have a bad debt problem. However, 51% of its debt is floating, which means its repayments will rise if interest rates go up. And in extreme circumstances, falling property prices could lead to a breach of its lending covenants.

Personally, I think the recent announcement by Ocado Group that six of its warehouses are to close over the next three years is proof that the death of the traditional supermarket has been greatly exaggerated.

Investing £10,000 in these three stocks could generate passive income of £710 over the next 12 months. That’s why I think these dividend shares could be considered for inclusion in a high-yielding income portfolio.

The post These 3 stocks are offering passive income of 7.1%. But is there a catch? appeared first on The Motley Fool UK.

Here’s how large your ISA might need to be for a juicy second income each month.

How much?

The answer to the question of how much you need comes down to the size of the dividend yields on offer. For a £500 monthly (or £6,000 yearly) income, an investor would need an ISA of:

• £120,000 if invested in 5%-yielding shares.
• £100,000 if invested in 6%-yielding shares.
• £85,714 if invested in 7%-yielding shares.

Stock markets have famously rallied over the last couple of years. This has made it harder to find quality, high-yield shares, but there are still plenty out there to choose from.

Purchasing higher-yield dividend stocks can come with greater risk. Large yields can be a product of a tumbling share price, reflecting significant problems facing a company.

But this isn’t always the case. In fact, the London stock market’s packed with strong, diversified companies with leading positions in mature industries.

It’s also worth remembering investors have hundreds of dividend stocks from across the globe to choose from. Why is this important? Holding 15-20 companies, say, in an ISA can help investors effectively balance risk and reward. Even if one of two companies deliver disappointing dividends, the broader portfolio can still deliver a big passive income from year to year.

Fill your dividend trolley

Supermarket Income REIT (LSE:SUPR) is a UK dividend share I’m expecting no drama from in the near term or beyond. It’s raised annual payouts every year since it listed on the London Stock Exchange in 2017.

This reflects the defensive nature of its operations (food retail), as well as its blue-chip client base. Companies like Tesco, Sainsbury’s and Waitrose are unlikely to default on their rent commitments even if times get tough.

This resilience also reflects dividend rules governing real estate investment trusts. These state that 90% of more of their rental earnings must be paid out to shareholders.

Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice.

Supermarket Income is sensitive to interest rate movements, and profits can fall when rates are higher. But for me this doesn’t take the shine off its excellent dividend credentials. Speaking of which, the forward dividend yield here is bang on 7%.

How long will it take?

As I say, the UK stock market’s packed with brilliant passive income shares. This is just one I think it worth serious attention right now.

But how long would it take to build an ISA of 7%-yielding stocks like this that generates a £500 passive income? If someone can invest £300 a month and get a 9% average annual return, they could hit their goal after just over 11 years.

The post How much do you need in an ISA for a £500 monthly passive income? appeared first on The Motley Fool UK.

Even an extra £100 a week can be unlocked in a relatively short space of time by individuals with a modest income. So how long will earning the equivalent of £5,200 a year take? And how much money needs to be put into an ISA to achieve it?

Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice. Readers are responsible for carrying out their own due diligence and for obtaining professional advice before making any investment decisions.

Running the numbers

Dividend stocks can come in all sorts of shapes and sizes, each offering different yields. On average, companies typically pay close to 4% a year. But by being selective and taking on a bit more risk, it’s possible to earn more, with some income stocks maintaining payouts close to a 7% yield today.

At this level of yield, to generate £5,200 a year, an ISA would need to be worth £74,285. Obviously, that’s a pretty hefty chunk of change. But the good news is that investors don’t need to have this cash ready overnight. Instead, it’s much easier (and often cheaper) to use the stock market to build to this threshold over time.

Let’s say the high-yield portfolio is able to generate a total return of 9% a year, thanks to a little extra growth from capital gains. In this scenario, drip feeding £500 a month will gradually build a near-£75k tax-free nest egg in around eight and a half years.

Getting started

Looking across the London Stock Exchange, there are currently 74 companies offering a yield of 7% or more. But in many cases, these ‘generous’ payouts are actually a warning sign of risks lying ahead. Don’t forget, if shareholders flee, the stock price falls, and the yield goes up.

The mission for high-yield investors is to spot the instances where investors have overreacted and accidentally created a lucrative buying opportunity.

With that in mind, let’s look at an area of the stock market that’s particularly unpopular right now – real estate. And specifically zoom in on the 7.2% yield offered by Supermarket Income REIT (LSE:SUPR).

Earning real estate income

The business manages a portfolio of 82 retail properties, occupied by UK supermarket giants such as Tesco and Sainsbury’s.

These retailers pay rent to this commercial landlord, which then uses the money to service its debts and reward shareholders with a chunky dividend. And with most tenant leases typically spanning over a decade, management has enjoyed superb revenue visibility that’s paved the way for seven years of back-to-back dividend hikes.

So what’s the catch? While rent collection and occupancy both stand at a perfect 100%, the balance sheet is nonetheless stretched with debt. And following aggressive interest rate hikes over the last few years, the company’s now paying out more to shareholders than it’s bringing in, albeit by a small margin.

But this may be a risk worth considering. As interest rates gradually continue to fall, the pressure of debt is steadily being alleviated. Assuming this trend carries on and tenants continue to pay rent on time, Supermarket Income REIT could continue being a lucrative source of passive income.

The post How much do I need in an ISA to earn a £100 weekly passive income? appeared first on The Motley Fool UK.

This stock operates in an industry that isn’t going away any time soon. And with a 7% dividend yield on offer, and a rapidly rising share price, I think it’s worth a closer look today.

Under-the-radar supermarket company

The stock I want to highlight is Supermarket Income REIT (LSE: SUPR). It’s a real estate investment trust (REIT) that invests in grocery store property across the UK and Europe.

It rents out this property to blue-chip supermarket companies such as Tesco, Sainsbury’s, Waitrose, Asda, Aldi, Marks & Spencer, and Carrefour on a long-term basis. Overall, it has around 80 properties (worth approximately £1.6bn) in its portfolio.

At present, shares in this REIT are trading for 86p. That means a £1,000 investment buys around 1,162 shares (ignoring trading commissions).

The stock may not trade at these levels for much longer though. Right now, it’s in a strong uptrend – it’s up about 6% year to date and 20% over the last 12 months.

Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice.

Four reasons to be bullish

In my view, there’s a lot to like about this stock right now. Let’s start with the fact that it looks immune to AI. No matter what happens in terms of AI disruption, humans are still going to have to eat. So, supermarkets appear to be a pretty safe bet from an investment perspective.

Another plus is that it offers exposure to a range of different supermarket companies (although Tesco and Sainsbury’s are its main customers). This is valuable as the UK supermarket industry is highly competitive and individual companies have been known to underperform at times.

Of course, we also have the monster dividend yield. This is a huge attraction. Naturally, the yield isn’t guaranteed. However, REITs are required to pay out 90% of their income to shareholders as dividends so the stock should provide plenty of cash flow for investors in the years ahead.

Finally, we have a rising share price. I suspect this stock is seeing more attention as investors seek out companies immune to AI disruption.

An investment opportunity?

Now, there are a few risks to consider. One is interest rates. In 2022, REITs were hammered when interest rates surged (because higher rates translate to higher interest payments on loans for property companies). Another move higher in rates could lead to share price losses for investors.

The growth of online shopping is also something to think about. In the long run, this could see fewer people visiting physical grocery stores.

Overall though, I see a lot of appeal in this FTSE 250 stock in the current environment. I believe it’s worth considering for a portfolio today.

The post £1,000 buys 1,162 shares in this red hot FTSE 250 property stock with a 7% dividend yield appeared first on The Motley Fool UK.

It means anyone investing £20,000 in the stock could earn £1,460 in passive income this year, equivalent to £122 a month. But does this make it a fabulous opportunity for income investors? Let’s see.

What does it do?

In common with many REITs, Supermarket Income has a simple business model. It buys properties – in this case large grocery stores in the UK and France – and rents them to blue-chip tenants on long-term leases.

HMRC requires REITs to return at least 90% of the profit from their rental business to shareholders in dividends. In theory, this means they receive approximately the same return as if they owned the property directly.

Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice.

Of all the various types of commercial property available, I think supermarkets are an excellent choice. Although an increasing amount of shopping is done online for collection or home delivery, most of the UK’s grocers use their stores to fulfill these orders. In my opinion, the demise of large shops has been greatly exaggerated.

Indeed, Supermarket Income has 100% occupancy of its properties.

Growing nicely

A look back at the results of the REIT for the past five financial years, shows good progress in improving its cash flow from operating activities, largely as a result of expanding its portfolio.

The trust’s dividend is, generally speaking, well covered by its cash flows. The exception was during the year ended 30 June 2025 (FY25), when there was approximately £9.4m of adverse working capital changes, but otherwise, there’s been plenty of headroom.

However, as the group’s grown, its share price has fallen. When combined with its steadily increasing dividend – it was 4% higher in FY25 than in FY21 – this has contributed to a rising yield. This could be interpreted as a warning sign that its payout’s unsustainable.

But in this case, I don’t think there’s any need to be alarmed. Although dividends are never guaranteed, with its high occupancy, 100% rent collection record over the past five years, and large number of inflation-linked leases, the payout looks reasonably secure to me.

Out of favour

The falling share price appears to be a trend among REITs. To expand, they usually have to borrow. And with interest rates rising after the pandemic they’ve seen their finance costs increasing. Also, a higher interest rate environment means investors have the opportunity to earn a good return elsewhere with less risk.

That’s why a key measure for the sector is the loan-to-value (LTV). In the case of Supermarket Income, its LTV was 31% at 30 June 2025, suggesting there’s plenty of leeway should the need for cash arise.

Some overlook REITs because their share prices are usually unexciting. And the commercial property sector, particularly in the UK, can be volatile.

But with its impressive track record and above-average dividend, I think Supermarket Income’s a great opportunity to consider. In fact, it’s just one of approximately 50 REITs on the UK stock market that could appeal to income investors.

The post This 7.3%-yielding REIT could turn £20,000 into £122 monthly passive income appeared first on The Motley Fool UK.

Who cares about whether OpenAI’s spending commitments are going to crash the stock market? Isn’t it easier to just sit back and collect a steady income from businesses that keep making money?

AI speculation

The stock market of the last couple of years has been artificial intelligence-obsessed. Defence spending and weight loss drugs get honourable mentions, but AI has been the big focus for investors.

Right now, big tech companies seem to be in a race to see who can spend the most money in the shortest time. Microsoft is expected to spend $100bn this year and Alphabet is targeting up to $185bn.

At today’s prices, that’s enough to buy Spotify. Twice.

CEOs are confident that this is going to work out. But when one of the biggest customers is OpenAI – a company that loses money and intends to keep doing so – there’s definitely a risk.

Passive income

The drive to invest in AI is either going to work incredibly well, or it’s going to blow up spectacularly. And there are strong and credible voices on both sides of the argument. 

Given this, investors might think the best way to earn good returns is to look for businesses that distribute their profits as dividends, rather than reinvesting most of them. And there are lots available.

In some cases, there are stocks with dividend yields as high as 7.5%. That means someone who invests £20,000 could collect £1,500 a year in cash just for holding on to their shares. 

High dividend yields can often be a sign of risk. But spending $185bn on AI data centres in anticipation of future demand isn’t exactly a risk-free enterprise.

Real estate investment trusts

Real estate investment trusts (REITs) are some of the most obvious dividend stocks around. In exchange for tax exemptions, they’re required by law to return 90% of their income to investors.

Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice.

One example is Supermarket Income REIT (LSE:SUPR), which owns a portfolio of – unsurprisingly – retail properties. The stock comes with a 7.5% dividend yield and there’s a lot of stability going forward.

Tesco and J Sainsbury make up over half of the firm’s rental income. The good thing is that they’re unlikely to default, but the risk is that high concentration makes negotiating rent increases difficult.

The vast majority of Supermarket Income REIT’s leases have over a decade left and inflation-linked increases should help protect returns. So I think steady long-term income is a realistic possibility.

Diversification

One of the things investors shouldn’t forget is that they don’t have to go all-in on any particular strategy. A diversified portfolio can often be more resilient than a concentrated one.

There’s scope to participate in AI growth potential without getting too exposed to the inherent risks. And I think Supermarket Income REIT could be a nice way of going about this. 

Share prices are volatile at the moment, as investors try to figure out what the implications of AI are going to be for corporate profits. But dividend shares might be a good way to bypass some of this.

The post How much do you need to invest in dividend shares to earn £1,500 a year in passive income? appeared first on The Motley Fool UK.

Here are three members of the UK’s second tier index of listed companies that currently have an amazing combined average yield of 9.6%. I think all are worth considering for those on the lookout for dividend shares.

As safe as houses?

Despite suffering a torrid time following the pandemic, UK housebuilder Taylor Wimpey (LSE:TW.) is currently paying a dividend of 8.8%. And with the housing market appearing to be recovering slowly — driven primarily by an improvement in mortgage affordability — I think the worst could be over.

In 2025, completions were 636 (6%) higher than a year earlier. And the group was able to raise its average selling price by £16,000 (5%). Despite this, as a reminder of how post-Covid inflation has affected the cost of building materials, operating profit was broadly flat. Its margin fell from 12.2% to 11%.

But with interest rates expected to fall over the coming months, this could help reinforce the early-stage recovery. And despite its recent woes, the group has a healthy balance sheet. Further ahead, the government’s proposed planning reforms should benefit Taylor Wimpey.

Becoming more efficient

The SDCL Energy Efficiency Income Trust (LSE:SEIT) has a current yield of 12.6%. Although it’s been steadily increasing its dividend, the dramatic fall in its share price has been the biggest factor behind this incredible return.

The trust now trades at a huge 42% discount to its net asset value (NAV). Part of this is explained by difficulties in valuing unquoted companies. But its relatively high debt has also been a concern. The trust has borrowed more than the 65% of its NAV that’s allowed under its rules. Asset disposals are underway to reduce this.

However, I think companies providing energy efficiency solutions are going to be among the long-term winners. We will get to net zero one day, but it might take longer than some, including shareholders in SDCL, would like. In my opinion, the trust’s been marked down more due to sector-wide concerns than anything specific to its own operations.

Going shopping

Primarily because of its 7.5% yield, Supermarket Income REIT (LSE:SUPR) is my favourite real estate investment trust (REIT). During its last financial year (30 June 2025), it reported 100% occupancy and no bad debts. This is testimony to the quality of the well-known grocery names that occupy its buildings in the UK and France.

Potential challenges include higher interest rates and a cyclical commercial property sector. Investors should also be aware that massive share price growth is unlikely.

But by whatever method we buy our groceries, whether it be online or in-store, there’s always going to be a need for physical shops. And with an average unexpired lease term of 12 years — and the majority of its leases containing provisions for inflation-linked rent increases — the REIT has plenty of visibility over future income levels.

Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice.

Some quick maths

Although I know there can never be any guarantees with dividends, a £10,000 investment spread equally across all three could yield £963 in year one. In my book, that’s worth considering.

The post With dividends of up to 12.6%, these could be the FTSE 250’s best passive income stocks appeared first on The Motley Fool UK.

According to Eddisons, a BTL rental yield in excess of 6% is “very good”, although it says this varies by region. For example, in the north of England and parts of Scotland, it might be possible to get something closer to 8%. However, this is a gross figure. It doesn’t take into account letting fees, repairs, and mortgage interest.

And then there’s tax to consider. Remember, holding a REIT in a Stocks and Shares ISA means any dividends and capital gains can be earned tax free.

I know from personal experience that being a landlord isn’t easy. That’s why I now prefer stocks and shares to bricks and mortar.

Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice.

Shopping around

In fact, one of my shareholdings is Supermarket Income REIT (LSE:SUPR). Based on amounts paid over the past 12 months, it’s yielding 7.1%. This is far superior to anything that I’ve ever earned on my BTL.

The REIT invests in omnichannel supermarkets in the UK and France, which are used for in-store shopping, click and collect services, and home deliveries.

One of the things that I like about REITs is that, generally speaking, they have very simple business models. For example, Supermarket Income employs just 15 people to look after its portfolio worth close to £2bn.

Towards the end of 2025, the trust went on a bit of a shopping spree buying more stores for its own portfolio as well as some for a joint venture with Blue Owl Capital. Latest figures show that this partnership now owns 23 assets with a value of £833m.

Impressively, for the 12 months to 30 June 2025, the trust had 100% occupancy and a perfect record of rent collection. Given that it claims it has a 75% exposure to “investment grade clients”, this is probably not surprising.

Looking ahead, 77% of its tenancy agreements provide for inflation-linked rent increases. And its weighted average unexpired lease term (WAULT) is 12 years. Both these factors give it a relatively high degree of certainty over its future revenue.

Buyer beware

Of course, there are risks. Dividends can never be guaranteed, especially in the commercial property sector, which can be volatile.

Larger properties are also facing significant increases in their rates bills. And in common with most REITs, Supermarket Income usually borrows to buy more properties. This means its earnings are vulnerable to a higher interest rate environment.

Also, due to the nature of its business, I’m not expecting its share price to take off any time soon. Slow and steady capital growth is probably the best that can be hoped for.

Supermarket Income is my favourite REIT. I like the sector that it operates in as well as its blue-chip tenants. And, of course, there’s the attractive dividend. For these reasons, I think it’s worth considering. And with each share costing approximately 84p, a lot less cash is needed to get a foothold in the real estate market than with a BTL property.

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