Supermarket chain Sainsburys has unveiled plans to create a £1.2bn joint venture with British Land to develop and operate 39 superstores throughout the UK .
Britain’s third largest grocer said it will invest £273m into the new firm in order to extend up to 25 sites by an estimated 500,000 square foot of selling area depending on obtaining the relevant planning permission.
The joint venture with British Land, which currently owns the stores, will allow the supermarket to manage store extensions better and gain a greater share of any rising value of its estate .
Once the initial 10-year term of the joint venture is up, Sainsbury’s will retain an equal degree of control over the continuing ownership of the properties with British Land.
Sainsbury’s chief executive Justin King said the partnership with British Land would enable the company to develop the stores involved and deliver an improved customer experience.
He commented: “This venture is an excellent opportunity for Sainsbury’s to increase our interest in the future extension and development of many of our most important stores .”
“This will enable us to enhance the customer offer, increasing both the trading and property value of these assets,” he added.
The joint venture news was announced alongside reports of a rise in like-for-like sales, excluding fuel, by 4.1 per cent during the 12 weeks to 22 March and also reported “strong growth” in sales of non-food items.
The better-than-expected fourth quarter growth means that Sainsbury’s achieved a like-for-like increase of 3.9 per cent for the past financial year and is on track to record pre- tax profits of around £480 million.
Mr King hailed the performance as an “outstanding success”.
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