Supermarket chain Sainsbury’s reported a £900m property loss in the year to 14 March.
The loss, which has brought the value of its estate down to £11.1bn, is mainly the result of a reduction in market rental values, the company said.
Its balance sheet reveals an overall pretax loss of £72m for the year, its first sales loss in a decade. The result compares with a profit of £898m last year.
The firm’s reported annual losses are not as substantial as those of its competitors Tesco and Morrisons, which reported losses of £6.4bn and £792m respectively.
Sainsbury’s underlying share of post-tax profits from its joint ventures with REITs were also down. Profits from its jv with British Land were down by £1m on the year before to £13m, and the company’s jv with Land Securities bought in £2m, unchanged from the previous accounting year.
In the financial year it opened eight stores, extended five and refurbished 13.
It will now add up to 450,000 sq ft of retail space over the next two financial years, and focus on convenience stores rather than supermarkets.
Earlier in the year Sainsbury’s announced plans to review its estate, which included withdrawing from a number of schemes in the pipeline, resulting in a £628m loss. This was reflected in its results for the first half of the year.
The company now aims to raise profits of around £200m in the next two years through mixed-use schemes.
This strategy means the supermarket will incorporate new leisure, residential and commercial aspects to its estate.
The firm has 1,500 London homes in the pipeline, as well as its £500m project with Barratt London at Nine Elms, which will open in 2016-17.
The Nine Elms scheme will include 737 homes, a new Sainsbury’s store and 27,000 sq ft of shops, restaurants and offices.
It has also begun exploring new property formats, which it hopes will be a “blueprint for future investment”, according to the company.
Chairman David Tyler said: “We will maintain the strength of the balance sheet by making significant cost savings, improving working capital and reducing capital expenditure. We remain committed to ensuring we pay an affordable dividend with our policy of fixing it at two times cover for the next three years.
“With this in mind, we are recommending this year a final dividend of 8.2 pence per share, bringing our full- year dividend to 13.2 pence per share.”
