Sainsbury’s said on Wednesday that it is in talks with LXi REIT to sell 18 supermarket stores for around £500m on a sale and leaseback basis and that if the deal goes through, it will use the proceeds to part-fund the acquisition of the 21 stores in the Highbury and Dragon investment vehicles.
The supermarket chain said it has reached an agreement on an acquisition price for the stores, on which it served notice to purchase last year and earlier this year. The acquisitions will complete in the first half of the financial year to March 2024.
Sainsbury’s has held an interest of about 49% in Highbury and Dragon since it was created in 2000. The vehicles comprise the freeholds of 26 Sainsbury’s supermarkets which are leased to the group.
The remaining 51% is owned by a joint venture between Supermarket Income REIT and British Airways Pension Trustees Limited. Sainsbury’s said this agreement marks a “significant” step in the process of bringing the structure to an end.