Insurance News Archive

Tesco tops the league for commercial property

Britain's biggest retailer, Tesco, has a property portfolio worth around £28 billion, according to the Daily Telegraph.

Through its property division Tesco has been able to generate nearly £140 million over the course of last year, equivalent to the estimated profits of fellow retailer Debenhams.

Tesco of course has many other incomes on top of this and out of every £8 spent in the UK £1 goes to the super-sized company.

Currently Tesco has been following the path of sell and leaseback which allows it to retain control of the property through a 50 per cent stake but also turn some of the value into capital.

Commenting on the valuation, Andy Higginson, Tesco's finance and strategy director, said: "We have tried to illustrate to the market what the value of the portfolio is, but at the same time keep that strong spine for future years."

However, with a total market valuation of £36 billion and £28 billion taken up in property, this suggests that Tesco is hugely undervalued at £8 billion, equivalent to nine week's sales, showing that the company is remaining cautious in ensuring its continued success.

24 Apr 2007