M&S unveils 'novel property deal'

Retailer Mark & Spencer has unveiled a property deal through which the company will inject £500 mln (EUR 757 mln) into its final-salary pension fund. The retailer, headed by Stuart Rose, said it would transfer assets valued at about £1.1 bn (EUR 1.66 bn) to a partnership with pension trustees in a move to cut a pension scheme deficit of £704 mln (EUR 1.066 bn).

The properties will be leased back to M&S and the property-backed partnership will make a 15-year fixed payment to the pension scheme of about £50 mln per annum. The pension scheme will retain the £500 mln partnership interest as part of its total investment portfolio, therefore reducing the pension deficit by this amount.

M&S will retain control over the properties, including the flexibility to substitute alternative properties. 'We want to make good the £700 mln gap in our pension fund, and we've done this through a fairly novel property deal,' said M&S ceo Stuart Rose.