Supermarkets sell stores to raise cash quickly: Asda and Morrisons lead the way with deals to decongest stores
Supermarkets are selling their stores to make quick money.
And Asda sold 25 supermarkets to US property investor Realty Income Corporation in a £650 million deal.
Asda used the money to buy most of the UK operations of its owner, EG Group.
Billionaire Issa brothers Zuber and Mohsin said the deal had helped EG make “significant progress” in reducing its debt.
They bought Asda three years ago in a controversial £6.8bn, debt-laden deal.
Asda and Morrisons – both of which are heavily in debt – led the way last year with deals to offload their stores and warehouses.
Although they are selling the property, the grocers can lease it back from the new owner and continue to operate the locations.
These sale-and-leasebacks accounted for almost half of real estate transactions in 2023 – compared to just one percent in 2022 – according to data from research group Colliers.
The sale-and-leaseback deals help free up money tied up in real estate to pay off debt.
Quick money: Asda and Morrisons – both of which are heavily in debt – led the way with deals to offload their stores
Morrisons said it completed approximately £450m of sale-and-leaseback transactions during the financial year to October 29, 2023.
And Asda sold 25 supermarkets to US property investor Realty Income Corporation in a £650 million deal.
Morrisons has net debt of £8.6 billion. Asda has £4.2 billion.
The companies declined to comment.