REAL ESTATE - UK retailer Sainsbury’s should sell off its £7.5bn (€11bn) property portfolio to fix a flawed capital structure, according to Robert Tchenguiz, one of its nine major shareholders.
Tchenguiz, whose investment vehicle, Razino, last week upped its stake in the firm from 4.68% to above 5%, was quoted by national newspaper the Daily Telegraph as saying: "This is a real estate company with a retail business on the side."
Neither Tchenguiz nor the retailer responded to requests for comment last week.
However, investment bank analysts were quick to back the idea of a sale-and-leaseback deal on Sainsbury’s 750 supermarkets. Although private equity firm CVC pulled its bid to acquire the retailer, realising value from its property portfolio via a sale-and-leaseback deal remains a likely option for the eventual buyer.
Earlier this year, Tesco, the UK’s largest supermarket chain, signed a sale-and-leaseback agreement with British Land. Likewise Marks & Spencer, which in January plugged a £704m hole in its pension fund via a property partnership that will see the retailer sell and lease back its £1.1bn property portfolio.
HSBC, the world’s third largest bank, said in February it planned to sell off its flagship UK headquarters in a 15-year sale-and-leaseback deal. The bank has already sold off country headquarters in Brazil and Singapore.