UK's Sainsbury's agrees 500 mln stg sale of stores to LXi REIT (updated)

LXi REIT

22/09/2022 07:59

(Adds detail)
       LONDON, Sept 22 (Reuters) - British supermarket group
Sainsbury's  SBRY.L  has exchanged contracts with LXi REIT
 LXIL.L  on a deal to sell 18 stores in southern England for 500
million pounds ($562 million) to the property investor and then
lease them back.
    The companies had said on Wednesday they were in talks on a
deal.
    LXi REIT said on Thursday completion of the acquisition was
conditional on it raising the necessary equity funding, for
which it is currently in talks with investors.
    Sainsbury's, Britain's second largest grocer after Tesco
 TSCO.L , has said if transaction goes ahead it will use the
cash to part fund the purchase of 21 stores from the Highbury
and Dragon investment vehicles.
    Sainsbury's has held a 49% interest in Highbury and Dragon
since it was created in 2000. The vehicles hold the freeholds of
26 Sainsbury's supermarkets which are leased to it.
    The remaining 51% is owned by a joint venture between
Supermarket Income REIT and British Airways Pension Trustees
Limited.
    Sainsbury's purchase of the 21 stores is part of its plan to
bring that structure to an end.
    It said both deals would result in a broadly unchanged
proportion of leasehold and freehold supermarkets in its
portfolio and would not impact financial guidance.
    Sainsbury's trades from over 600 supermarkets and over 800
convenience stores and has 10.4 billion pounds of property
assets.
    ($1 = 0.8897 pounds)
 (Reporting by James Davey; Editing by Kate Holton and Mark
Potter)
 ((james.davey@thomsonreuters.com))