Morrisons in Talks for £600 Million Real Estate Financing Deal
British supermarket group Morrisons is in discussions with several parties, including US-based Realty Income, over a potential £600 million ($803 million) real estate financing deal, according to a Sky News report citing industry sources. The proposed transaction is not expected to follow a traditional sale-and-leaseback structure but may instead involve financing secured against a portfolio of the retailer’s store properties. Earlier this year, Morrisons appointed real estate advisor CBRE to explore options for raising up to £1 billion against part of its freehold store portfolio.
Morrisons, the UK’s sixth-largest supermarket chain, continues to focus on improving operational efficiency amid intense competition in the domestic grocery market and weaker consumer spending. Alongside groceries, the retailer also sells a wide range of non-food products, with its Nutmeg clothing brand occupying significant space across its stores. Rising energy costs linked to geopolitical tensions have added further pressure on the retail sector.
Owned by US private equity firm Clayton, Dubilier & Rice, Morrisons has fallen behind rivals Tesco, Sainsbury’s and discount retailer Lidl, which recently overtook it to become Britain’s fifth-largest grocer, according to industry data. Morrisons, Realty Income and CBRE did not immediately respond to Reuters’ requests for comment regarding the reported discussions.
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