Property Deal

RNS Number : 2498A

Tesco PLC

05 October 2009

 



5 October 2009

TESCO ANNOUNCES NEW PROPERTY DEAL

Tesco today announced a new sale & leaseback transaction involving property assets valued at £514 million in the latest phase of its ongoing programme to release value from its UK property portfolio.  

The deal will be structured as a 50-50 joint venture with a UK pension fund.  The portfolio will consist of 15 Tesco stores, accounting for approximately 75% of the transaction value, and two distribution centres, accounting for the remaining 25%.  The properties involved have a gross internal area in excess of 2.7 million sq. ft.

All properties will be leased back to the joint venture on 30-year RPI-linked leases, with an average initial yield of 5.2% for the stores and 6.3% for the distribution centres.  

The transaction is being funded primarily by fixed rate notes issued by Tesco Property Finance 2 PLC (the debt-issuing entity of the joint venture, credit-linked to Tesco PLC). 

Notes for editors

1. The marketing of the fixed rate notes issued by Tesco Property Finance 2 took place during the week commencing 14 September.

Contacts:

Investor Relations:	Steve Webb	01992 644800
	Mark George	01992 806149
Media:	Jonathan Church	01992 644645

 

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