A record number of UK supermarkets changed hands last year, as debt-laden chains sold off stores to investors hungry for long-term income.
In 2023, food stores valued at a record £2.49bn were bought and sold in the UK, according to data from Knight Frank. That is three times as much as the previous year, when there were £770m of supermarket deals, and is 71% above the 10-year average of £1.4bn.
Some of the biggest deals involved Asda and Morrisons – both of which are owned by private equity firms – selling and then leasing back some of their stores.
However, supermarket chains with access to cheaper capital have been trying to buy out their landlords, where possible. In March, Sainsbury’s paid £431m to buy back the freeholds of 21 of its stores from Supermarket Income REIT.
Knight Frank expects investment volumes for food stores to “remain strong” in 2024, albeit below last year’s record levels.
