Tesco PLC, one of the big four supermarkets has agreed to sell and leaseback four commercial properties in its subsidiary.
Homeplus Co. Ltd, was originally started as a joint venture in 1999 by Tesco and Samsung. But Tesco later bought out Samsung and now the company is solely owned by Tesco. But as part of Tesco’s strategy to “release value from our international property portfolio” the company decided to part with some of the South Korean assets.
The deal between Tesco and a number of interested investors was controlled by a retail property investment company, IGIS Asset Management. Tesco agreed to sell and leaseback four commercial properties and mall space that accompanies the properties.
Speaking of the sale, Clive Black an analyst from Shore Capital, an independent investment group, said: “The proceeds from the disposal are expected to assist the development of the Korean business from both financing and investment perspectives. As per the statement, we would expect further such activities to feature on an ongoing basis across Tesco’s core international markets.
“With store closures now required on two Sundays each month, the key shopping day in the country, plus a restriction on 24-hour opening, business at the large stores of Homeplus and the other major players is negatively impacted. Added to this regulatory burden is a weak and highly leveraged consumer economy.”
It is not yet clear who has bought the Homeplus stores, but the deal is expected to be worth around £300 million.
The Homeplus retail chain has over 450 commercial properties and employs around 27,000 local people, serving six million customers every week. It is the second largest chain in the country, behind Shinsegae Group. The stores typical stock clothes, electronics, home ware and food products. Some stores also have restaurants, travel agents, bookstores and pharmacies attached to the commercial property.
The chain generated around £5 billion in 2011-2012 and is Tesco’s most successful business overseas.
Previous Post
Property Developer Hammerson Supports Retail Expansion
