Tesco Has Completed a Sale-Leaseback Transaction

TSCO: 392.84

-3.16 (-0.80%)

Tesco has completed a sale and leaseback transaction as it continues with its programme to release value from its UK property portfolio.
20 shops and one site and mall under development have been sold for £685m for an average net initial yield of 4.7%.
The deal is a 50-50 joint venture with Tesco Pension Fund Trustees as a trustee of the Tesco PLC Pension Scheme. The transaction is primarily being funded by fixed rate notes issued by Tesco Property Finance 4 PLC. Tesco plc (LSE: TSCO) is a global grocery and general merchandising retailer headquartered in Cheshunt, United Kingdom. It is the fourth-largest retailer in the world measured by revenues after Wal-Mart, Carrefour and Metro and the second-largest measured by profits after Wal-Mart. It has stores in 14 countries across Asia, Europe and North America and is the grocery market leader in the UK (where it has a market share of around 30%), Malaysia and Thailand.
The chain was founded by Jack Cohen in 1919. The brand first appeared after Cohen bought a shipment of tea from T.E. Stockwell and he used those initials and added the first two letters of his own surname. The first Tesco store was opened in 1929 in Burnt Oak, Edgware, Middlesex. Originally a UK-focused retailer specialising in food and drink, it has diversified both geographically and by product, into areas such as clothing, electronics, financial services, telecoms, home, health, car and dental insurance, retailing and renting DVDs
A leaseback is very simple really. Sometimes known as a sale/leaseback or sale and leaseback, it is a transaction wherein the owner of a property sells that property and then leases it back from the buyer. A sale-leaseback transaction is a great alternative form of financing which allows business owners to fully maximize the value and position of their real estate assets.