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The consortium in the process of buying supermarket chain Asda plans to partly finance the deal by raising more than £1B in a sale-and-leaseback of the company’s distribution network.
EG Group and TDR have appointed Eastdil Secured to examine the possibility of selling a portfolio of 25 distribution centres for between £1B and £1.2B, React News reported.
EG Group, owned by the billionaire Issa Brothers, made its money from petrol stations, and the company has now branched out with a deal to buy the top-five UK supermarket chain from U.S. giant Walmart.
UK Logistics is a hot property sector right now, with yields currently at levels more associated with prime CBD offices. Any sale would see Asda’s new owners quickly recoup more than 15% of their purchase price.
Asda’s property was seen as a major source of value for any buyer of the company. It owns 75% of the freeholds on its 631-store estate.
Supermarkets have historically shied away from selling too many store freeholds because it limits their ability to pivot their business according to consumer trends.
In 2006, Robert Tchenguiz was part of an ill-fated attempt to buy Sainsbury's and turn it into a REIT.
The deal to buy Asda still needs to be approved by the competition commission.
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