By Ed Ballard
LONDON-- Tesco PLC has agreed a 733 million-pound ($1.08
billion) real-estate swap with British Land Co. in a deal the U.K.
supermarket giant said will simplify the business and mean it owns
the freehold of more of its stores.
The company will also get a cash payment of GBP96 million pounds
as it seeks to revive its fortunes.
British Land has sold to Tesco its 50% stake in a portfolio of
21 stand-alone food stores valued at GBP352 million, the companies
said Friday. In exchange, the commercial developer bought Tesco's
50% interest in two portfolios valued at GBP381 million that are
made up of shopping centers and retail parks anchored by Tesco
outlets.
"Last year we identified the opportunity to increase the
proportion of our stores we own as freehold," said Tesco's Chief
Executive Dave Lewis.
"This transaction with British Land allows us to increase our
ownership and thereby insulate more of our businesses from indexed
rent reviews...This agreement makes our business simpler and
stronger," he added.
The cash payment of GBP96 million reflects the difference in
value between the assets changing hands and their associated debt,
British Land said.
Write to Ed Ballard at ed.ballard@wsj.com
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