Tesco in £366m property sale

Supermarket giant Tesco realised £366m (€524m) from its property estate today after agreeing a sale-and-leaseback deal involving 14 of its UK sites.

Tesco said the creation of a joint venture with Consensus, which is run by property tycoon Vincent Tchenguiz, would give it “further flexibility and firepower” to take advantage of opportunities in all parts of its business.

The transaction involves 12 Tesco stores and two distribution centres, accounting for around 1.5% of Tesco property assets by floor area. The joint venture is for a term of 27 years with an early termination option in 2015.

It follows a number of similar sale and leaseback deals carried out by Tesco and other retailers in recent years. The retailer, which has more than 1,800 outlets, has not disclosed the locations of the properties involved.

Tesco finance director Andrew Higginson said: “This latest joint venture allows us to release funds efficiently from our valuable property portfolio and at the same time remain free to improve the stores for our customers by extending or remodelling them.”

Mr Tchenguiz made his name with brother Robert by setting up property group Rotch, which now owns in excess of £4bn (€5.7bn) of real estate.