Tesco agrees £514m sale & leaseback deal

5th Oct 2009 16:05

Supermarket giant Tesco announced a new sale and leaseback deal involving property assets valued at £514m in the latest phase of its ongoing programme to release value from its UK property portfolio. The deal will be structured as a 50-50 joint venture with an unnamed UK pension fund. The portfolio will consist of 15 Tesco stores, accounting for about 75% of the transaction value, and two distribution centres, accounting for the remaining 25%.The properties involved have a gross internal area in excess of 2.7 million sq. ft.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.