The UK’s biggest retailer, Tesco say they have carried out a sale and lease back deal for property valued at £514million with an unnamed UK Pension fund.
The deal will see Tesco selling fifteen of its stores and two of its distribution centres to a 50-50 joint venture company owned by Tesco and the unnamed pension fund.
All properties will be leased back to the joint venture on 30-year RPI-linked leases, with an average initial yield of 5.2% for the stores and 6.3% for the distribution centres.
The deal is the latest phase in the firms ongoing programme to release value from its property portfolio – a programme that was started in 2006 and now with a transaction value of £3 billion. It aims to keep 70% of its properties on a freehold basis, a level that is maintained through new store openings.
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