Tesco Announce Joint Property Venture Worth Millions

Fri, 23 Mar 2007
 
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UK supermarket leader’s Tesco have released more than £1 billion of capital from its bumper stores portfolio in less than three months after unveiling a joint property venture involving 21 of its stores.

The deal covers giant Tesco stores stretching from Dundee to Ashford in Kent .

Tesco announced back in April 2006 that an agreement had been made with British Land - the fourth deal between the two companies - to free up more than £5 billion of capital from its valuable property assets by the end of the decade.

The grocery retailer reported a sale-and-leaseback deal with the British Airways pension fund in January and yesterday said it would generate profits of £142million from proceeds of £570million on stores equivalent to 3 per cent of its estate .

The portfolio contained in the joint venture has an initial rent of £29million per year and includes annual rental uplifts capped at 3.5 per cent per year.

"The 50/50 joint venture enables Tesco to release funding for its future growth, whilst maintaining the flexibility to operate and adapt its property assets," said a spokesman for Tesco .

This year is expected to bring more sale and leaseback deals for Tesco, which currently sits on just under £16billion worth of property at the last count.

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