Tesco strikes sale and leaseback deal

Tesco strikes sale and leaseback deal

Tesco will raise over GBP355m (US$586.8m) through a sale-and-leaseback agreement in South Korea.

The deal, reached with real estate firm Samsung SRA, will see Tesco hand over ownership of four of its Homeplus stores and accompanying mall space.

"Following the successful sale and leaseback of four Homeplus stores in August 2012, this announcement further demonstrates the underlying value of our operations in Korea and the attractiveness of our property and business to investors," the company said today (3 January).

Homeplus is Tesco's largest international business with annual revenues of more than GBP5.3bn and more than 520 stores in the market. However, sales in South Korea have come under pressure in recent quarters due to the weak consumer environment and regulatory restrictions on opening hours.

The move suggests Tesco aims to unlock the value of some of its international property portfolio while moving to a less capital-intensive model. Tesco shares were broadly flat in London today, rising 0.11% at 16.20 GMT.

Show the press release

Tesco confirms sale and leaseback deal in South Korea

FacebookTwitterLinkedIn Tesco has today confirmed the successful completion of a sale and leaseback transaction in South Korea. Homeplus Co. Ltd, a wholly owned subsidiary of Tesco PLC, has concluded the transaction with Samsung SRA, a real estate fund manager focused on commercial real estate in Korea and overseas. The deal comprises a portfolio of four Homeplus stores and accompanying mall space, with total gross proceeds in excess of £355 million. Following the successful sale and leaseback of four Homeplus stores in August 2012, this announcement further demonstrates the underlying value of our operations in Korea and the attractiveness of our property and business to investors.

Notes to Editors Tesco entered South Korea in 1999 in a joint venture with Samsung; Homeplus Co. Ltd is now a wholly owned subsidiary of Tesco PLC Homeplus in South Korea is Tesco’s largest international business with revenue of over £5bn in 2012/13 Homeplus has more than 550 stores in South Korea and employs over 26,000 people Homeplus serves six million customers per week Samsung SRA is a real estate fund manager focused on core and core-plus commercial real estate in Korea and overseas.

Original source: Tesco