Sainsbury has ruled out selling its property assets in the near future. During a conference call to present its results for the second half of 2006, chairman Philip Hampton of the UK's third-largest supermarket chain said Sainsbury is 'right to retain ownership of its properties'. Sainsbury has been considering using a sale of its property to raise capital but has finally decided that 'now is not the time'.
Sainsbury has ruled out selling its property assets in the near future. During a conference call to present its results for the second half of 2006, chairman Philip Hampton of the UK's third-largest supermarket chain said Sainsbury is 'right to retain ownership of its properties'. Sainsbury has been considering using a sale of its property to raise capital but has finally decided that 'now is not the time'.
'Property has always been at the heart of our business and is closely aligned to our successful operation. Our estate still has considerable development potential which we believe will maximise both operational and freehold property value. As we move from recovery to growth we believe it is right to retain ownership of our properties,' Hampton said.
Sainsbury is planning to extend 75 of its 788 stores and will spend £2.5 bn until 2010 to open 30 new supermarkets. The company's real estate has a current market value of £8.6 bn, 65% above its book value of £5.2 bn, Sainsbury said. The valuation is boosted by an improved operating performance, according to ceo Justin King.
The supermarket giant is believed to be resisting pressure from 5% shareholder Robert Tchenguiz and 17% shareholder Three Delta, a Qatar-backed investment group. Tchenguiz is reportedly pushing for Sainsbury to sell up to £4 bn of real estate to give shareholders a quick return on their investment.
