Grocers shed surplus sites

Published:  22 March, 2017

Value of supermarket portfolios down 17 per cent in two years

The value of property owned by Tesco, Sainsbury’s Asda and Morrisons has fallen by 17 per cent in two years to £37.8bn, down from a peak of £44.3bn, according to research by peer-to-peer lending platform Saving Stream.

Consumer shopping patterns have changed and supermarkets are selling off property assets that no longer fit their business models and writing down the value of their remaining portfolio. Many of the properties are ‘out-of-town’ brownfield sites suitable for new housing but smaller urban and suburban sites are also potentially up for sale.

Saving Stream says that this represents a significant opportunity for developers of residential property and could help alleviate the housing crisis if developers can secure sufficient funding.

For example, in 2015 Tesco sold off 14 unwanted sites for residential development into 10,000 homes in a £250m deal, as part of its plans to offload almost 50 redundant sites.

Liam Brooke, co-founder of Saving Stream parent company Lendy, said: “UK supermarkets are increasingly looking at reversing a long-term strategy of ‘land-banking.’ Opportunistic purchases of sites for potential future stores were intended to provide a strategic advantage, build market presence and lock out competitors from certain areas.

“Developers could be major beneficiaries as supermarkets start to scale back their property portfolios, with smaller sites just as likely as larger development opportunities to be offloaded.”

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