Asda’s owners, Mohsin and Zuber Issa, engage in talks to sell part of their property portfolio, valued at approximately £500m.
- The transaction involves Macquarie Asset Management potentially acquiring ground rent leases for 50 Asda stores across the UK.
- Under the agreement, Asda will regain ownership for a nominal fee after a 50-year term.
- This sale is part of a broader strategy to manage Asda’s growing debt by raising equity through property transactions.
- The Issa brothers previously sold 25 stores to Realty Income Corporation in a £650m deal, also leveraging sale and leaseback arrangements.
Asda’s billionaire owners, Mohsin and Zuber Issa, are reportedly in discussions to sell a significant portion of the supermarket’s property estate. The potential transaction, valued around £500 million, is poised to involve Macquarie Asset Management acquiring ground rent leases associated with 50 Asda stores across Britain. The leases are structured to last 50 years, after which Asda would be able to reassume ownership for a modest amount. This strategic approach allows Asda to manage its substantial debt by generating substantial equity while maintaining operational control of its properties.
The supermarket heavyweight has been strategically leveraging its property assets to alleviate financial pressures. In July, the Issa brothers sold another 25 Asda stores in a £650 million deal to US investor, Realty Income Corporation. In this arrangement, the properties were sold and then leased back to Asda, enabling it to benefit from immediate capital influx while continuing to operate these sites.
Earlier in the year, the Issa brothers orchestrated a $1.5 billion sale and leaseback deal involving their EG Group’s US property portfolio. This transaction encompassed the sale of 415 stores on the US east coast to Realty Income.
Expanding their footprint in the grocery sector, the Issa brothers also completed a notable acquisition within the UK and Ireland, where EG’s operations were sold to Asda for £2.27 billion. This acquisition included 350 petrol stations and over 1,000 food-to-go locations, further solidifying Asda’s presence in these markets.
These strategic property manoeuvres reflect Asda’s commitment to leveraging its assets effectively to enhance financial stability and operational continuity.
