Tesco has announced the £445m sale and leaseback of 16 stores to the British Airways Pension Fund.
The retailing giant entered the 50:50 joint venture to realise the funds for future growth “taking advantage of attractive conditions within the debt and equity markets”.
The transaction includes 16 Tesco stores, accounting for 2% of Tesco UK property assets by gross floor area.
The deal reflects an initial yield of less than 4.5%.
The joint venture is for a term of 20 years with an early termination option in 2016.
Annual rental uplifts are linked to a limited prices index calculated by reference to RPI, collared between zero and 3.5% pa.
The joint venture follows Tesco’s announcement in April last year of a sale and leaseback programme that is expected to realise proceeds of up to £5bn over five years from its UK freehold estate.
The sole debt provider was Deutsche Bank.
References: EGi News 04/01/07
