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Tesco raises Rs4,849 cr from property sale

Tesco raises Rs4,849 cr from property sale
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First Published: Wed, Mar 21 2007. 07 24 PM IST
Updated: Wed, Mar 21 2007. 07 24 PM IST
By A Couch and S Packard/Bloomberg
London: Tesco Plc., Britain’s biggest retailer, raised 570 million pounds ($1.12 billion) by selling a 50% stake in 21 stores to British Land Co., to help pay for the company’s expansion.
Tesco will lease back the outlets for 20 years from a venture formed with British Land that will own them, the companies said on 21 March. The supermarket operator will make a profit of 142 million pounds on the sale and has an option to end the lease in 2017.
This is the fourth venture between Tesco, based in Cheshunt, and London-based British Land, Europe’s second-largest real estate investment trust. It’s the largest sale-and-lease back deal to date by the retailer since last year, it set itself the goal of raising 5 billion pounds in five years through property sales.
Direct investment in U.K. retail property returned 15.2 percent last year, mainly from higher building values. Retail- related real estate returns lagged behind those of offices and warehouses, prompting investors to focus on retail properties in the best locations and the best tenants.
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First Published: Wed, Mar 21 2007. 07 24 PM IST
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