Tesco is seeking to continue its sale-and-leaseback programme with a wave of deals that could be worth £500 million to the retailer. The supermarket giant is in talks with potential investors to sell about a dozen of its stores on a part sale-and-leaseback basis.
It is a tactic that Tesco has used to great effect in the past. In February, it made £207 million from a similar deal with Prudential and in 2005 it sold stakes in 12 of its stores, generating £636 million.
The use of the sale-and-leaseback – which has also paid dividends to other big supermarket players, most notably Sainsbury’s – is part of chief executive Tesco CEO Sir Terry Leahy’s long-term strategy to release £5 billion from Tesco’s property portfolio to fund the company’s international expansion.
Demonstrating the value of the sale-and-leaseback, Leahy has said that the money raised from a 50,000 sq ft (4,645 sq m) UK store is enough to fund a 500,000 sq ft (46,450 sq m) Tesco-anchored shopping centre in China.
Source: Retail Week
