Every little helps
Beleaguered supermarket chain Tesco is trying to turn the tide after its £263m accounting mistake last year.
First pit stop – regaining ownership of 21 superstores in a £733m deal with British Land.
This, according to Tesco CEO Dave Lewis, will help Tesco “strengthen its core UK business”.
Under the deal, British Land will acquire Tesco’s stake in three shopping centres, three retail parks and three standalone stores. These stores are a part of a joint venture of Tesco and British Land and are not subject to RPI-indexed rent increases. Tesco will also receive £96m from British Land as part of the agreement.
Tesco chief executive Dave Lewis said: “Last year we identified the opportunity to increase the proportion of our stores we own as freehold.
“This transaction with British Land allows us to increase our ownership and thereby insulate more of our businesses from indexed rent reviews.
“We have a long way to go but it’s a transaction which takes us in the right direction. This agreement makes our business simpler and stronger.”
Charles Maudsley, British Land’s head of retail, said of the deal: “This mutually beneficial transaction clearly demonstrates the great relationship we enjoy with Tesco.
“It plays to our strengths of managing multi-let assets and gives Tesco more control of their stand-alone portfolio.
“We see significant opportunity to add value and drive returns through asset management and development.”
MORE ON TESCO’S TROUBLES:
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