Supermarket Income REIT PLC on Wednesday said it can now begin to consider the possibility of a more favourable interest rate environment as net rental income rose.

The London-based real estate investment trust said net asset value per share declined to 90 pence as at June 30 from 98p a year ago.

EPRA net tangible assets per share edged down 6.5% to 87p as at June 30 from 93p a year prior.

Net rental income climbed 13% to £107.9 million in the financial year ended June 30, from £95.2 million a year ago.

Notably, loss from a change in fair value of investment properties reduced sharply to £65.8 million from £256.1 million.

Service charge income rose 15% to £6.8 million from £5.9 million. However, service charge costs increased 14% to £7.4 million from £6.5 million.

Pretax loss narrowed to £21.3 million from £144.9 million.

Supermarket Income announced a dividend of 6.1p per share, up 1.7% from 6.0p a year ago.

Looking ahead, Chair Nick Hewson said: ‘In the context of the recently challenging macro headwinds, we can now begin to consider the possibility of a more favourable interest rate environment. Market expectations of modest interest rate cuts over the coming months, albeit not returning to the levels of the 2010s, provide confidence that we have now seen the floor in this current cycle.’

He added: ‘Looking ahead, we remain optimistic that the improving interest rate environment should provide positive tailwinds for the company.’

Supermarket Income shares were 0.5% lower at 76.40 pence each on Wednesday morning in London.

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