Meyer Bergman is buying a portfolio of UK development sites from grocery chain Tesco.

The investment manager is to pay £250m (€339m) for 11 sites suitable for mixed-use and residential development.

Tesco said the sale is a “strategic priority” as it looks to strengthen its balance sheet. The chain has previously announced plans to cut development and build fewer stores.

The ‘Spenhill’ sites in suburban London, the South East and Bath were bought by Meyer Bergman for a fund and clients.

Markus Meijer, chief executive at Meyer Bergman, said: “We see this investment as an opportunity to give new impetus to the Spenhill projects, to make Tesco’s place-making ambitions for the sites happen and to make an enduring contribution to local communities.”

Dave Lewis, Tesco’s chief executive, said: “Since announcing our decision to build fewer stores, we have been working with Meyer Bergman to bring forward investment on our Spenhill sites.”

Lewis said the deal will bring forward “significant investment”, including opportunities for residential development.

“We will be working with Meyer Bergman and local councils in the coming weeks to complete a formal handover and look forward to the delivery of investment on these sites,” he said.

Meyer Bergman is currently raising capital from institutional investors for a third European property fund. The investment manager’s existing €750m fund is now fully committed, following the £80m purchase of a mixed-use London asset in July.