Morrisons is preparing to put a second tranche of assets up for sale as the supermarket sector remains in a state of flux.
The retailer has appointed Rothschild and Cushman & Wakefield to look at the sale and leaseback of around £250m of retail and industrial assets.
The move comes at a time when the big four supermarkets – Tesco, Sainsbury’s, Asda and Morrisons – are losing market share against the discounters.
This week Sainsbury’s announced a £290m half-year loss after writing down the value of its existing estate by £341m and halting the development of 40 new stores, at a cost of almost £300m.
And last month, Tesco hinted that it could offload some of its property portfolio in a bid to plug a £263m profits black hole (25 October, p43).
Land Securities chief executive Rob Noel, who reported a stellar set of results for the REIT this week, said that the firm planned to exit its holdings in supermarkets. Despite the value of its retail park and foodstores estate growing by 4% to £1.2bn, rents are falling as demand for big-box properties from occupiers declines.
Morrisons first came under pressure from shareholders to offload a portion of its 500-strong freehold estate in September 2013. Cushman & Wakefield was appointed to lead the disposal of as much as 10% of the estate in April this year. A first tranche of assets was bought by M&G Investments in October for £110m – a 4.5% blended yield.
One retail agent said: “There is limited demand for supermarket assets, most of the big funds have had their fill. There will be a market for them as a rare commodity, but recent reports will deter a rush of institutions.”
• As the big four dispose, the discounters expand. Aldi wants to almost double the number of its UK stores to 1,000 by 2022. It is investing more than £100m in the construction of more than 30 properties in the next 12 months.
