Sainsbury’s and Asda said that no stores would close as a result of their £13B merger. But landlords to the two supermarket giants will be watching the deal closely to gauge the impact on a portfolio that touches every corner of the U.K.

British Land, CBRE Global Investors, Legal & General, Aberdeen Standard and Aviva Investors are the five biggest landlords to the two companies, according to data from Real Capital Analytics. British Land has a joint venture with Sainsbury’s that comprises 19 stores valued at £623M, according to the company’s website.

The two supermarkets own more than 2,800 stores totalling 118M SF, and while there were assurances that no stores would close, experts were split on the impact of the merger on the portfolio. Some stores could be disposed of to other retailers.

Asda owns more than 75% of its portfolio freehold, with some estimates putting this figure as high as 90%, whereas between 50% and 65% of Sainsbury’s portfolio is leased.

According to data from Estates Gazette there is some overlap between the portfolios: 23% of Asda stores and 12% of Sainsbury’s stores lie within 1 kilometre of each other. GlobalData said to get past the Competition and Markets Authority, the combined entity would need to dispose of at least 75 stores.

“Potential ramifications of the merger could create various opportunity areas, if there are store closures in the distant future,” EG analyst James Child said. “Landlords could be at risk of having to fill a huge amount of empty space — and filling those vacant stores with tenants may become problematic.”

"Where there are any closures, then it’s critical for local communities that property owners, local councils and the merged business work collaboratively and quickly to ensure these sites are re-occupied,” Revo Chief Executive Ed Cooke said.

The crossover is more limited than it might have been because Asda has a greater presence in the north of England, Sainsbury’s in the South, and Colliers International Head of Retail Capital Markets said London stores were less likely to be disposed of.

“The London stores generally tend to make a greater contribution to profitability,” he said.