Tesco has completed a £733m property swap with property developers British Land, giving the supermarket sole ownership of 21 of its superstores, while relinquishing part ownership of two other portfolios.
British Land has sold its 50% interest in the joint venture portfolio of 21 superstores to Tesco, and acquired Tesco’s 50% interest in two other joint venture portfolios, comprising three shopping centres, three retail parks and three standalone stores. The names of the specific schemes have not been revealed.
Tesco will continue to lease the stores at these sites at market rents, which are not subject to RPI-indexed increases. As part of the transaction, it will also receive £96m from British Land.
Dave Lewis, chief executive of Tesco, 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.”