Tesco succeeds in 514m sale and leaseback deal
BRITAIN’S biggest retailer, Tesco, said yesterday it had carried out a sale and leaseback deal for property assets valued at £514m.
The transaction, structured as a 50-50 joint venture with an unnamed UK pension fund, represents the latest phase in the firm’s ongoing programme to release value from its property portfolio.
The deal involves 15 Tesco stores and two distribution centres, which have a combined gross internal area in excess of 2.7m square feet.
The properties will be leased back to the joint venture on 30-year Retail Price Index (RPI) linked leases, with an average initial yield of 5.2 per cent for the stores and 6.3 per cent for the distribution centres.
The deal is being funded primarily by fixed rate notes issued by Tesco Property Finance 2 – the debt issuing entity of the joint venture.
Tesco publishes its first-half results today.