British supermarket group Morrisons is reportedly in discussions with several parties, including U.S.-based Realty Income, over a property financing deal worth around £600m.
According to industry reports, the proposed transaction is not expected to follow a traditional sale-and-leaseback structure but instead could involve financing secured against a portfolio of Morrisons’ freehold stores.
The move follows Morrisons‘ appointment of real estate adviser CBRE earlier this year to explore options for raising up to £1bn by leveraging part of its extensive property portfolio.
The supermarket chain has been focused on improving operational efficiency as it faces intense competition in the UK grocery market and weaker consumer spending amid higher living costs and rising energy prices.
Owned by U.S. private equity firm Clayton, Dubilier & Rice, Morrisons has fallen behind major rivals including Tesco and Sainsbury’s, while discount retailer Lidl recently overtook the company to become the UK’s fifth-largest supermarket group.
Neither Morrisons, Realty Income nor CBRE has publicly commented on the reported discussions.
