Morrisons is in discussions with Realty Income over a property transaction worth around £600m ($803.6m) as the UK supermarket group looks to secure additional funding for its turnaround plans, according to Sky News.
US investor Realty Income is said to be one of a small number of parties holding talks with advisers to the UK-based retailer
Industry sources cited in the report said the arrangement was unlikely to follow the structure of a typical sale-and-leaseback deal and might instead take the form of financing secured against a group of the chain’s stores. No deal is understood to be close, even though Morrisons brought in real estate adviser CBRE six months ago to examine options. The same sources said any eventual transaction was likely to come in below the £1bn figure that had circulated earlier in the year.
Realty Income has built up a substantial presence in UK retail property, having signed multi-billion-pound agreements covering sites occupied by Asda, Tesco, Sainsbury’s and Waitrose. Morrisons runs 500 stores across the UK and has a workforce of approximately 95,000. The company holds freehold ownership over close to 80% of its estate, among the highest shares in the industry.