More UK supermarkets changed hands than ever before last year as mounting debt piles saw chains selling off stores to raise extra cash.
Around £2.49bn worth of food stores were bought and sold in 2023, according to data from property services firm Knight Frank, which is more than three times the amount as the year before and 71% above the ten-year average of £1.4bn.
The biggest deals included private equity-owned Asda and Morrisons selling and leasing back a handful of its stores.
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Asda – which is owned by billionaire brother Mohsin and Zuber Issa and backed by TDR Capital – sold and then leased back 25 supermarkets to American property investor Realty Income Corporation for £650m over the summer.
The grocery chain was also reported to be considering an offer from an Austrailian firm for 50 stores in a deal worth £500m in August.
Realty Income also owns a tranche supermarkets from Morrisons – owned by Clayton, Dubilier & Rice – that it bought for £175m.
Knight Frank retail chartered surveyor Josh Roberts said: “While commercial property volumes look set to decline by around 50% overall in 2023, retail property investment has been resilient, buoyed by a record year for food stores.
“This is driven by a flight to safety, with supermarkets offering some of the strongest covenants available on long, inflation-linked leases and a significant increase in sale-and-leaseback transactions.”
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1 Comment. Leave new
Sale and leaseback can be a good strategy for growth. In the cases of Asda and Morrisons, though, it is desperation. Morrisons in particular, will seriously p*** o** their landlords.