// Sainsbury’s has agreed to offload a portfolio of prime retail sites to real estate investor LXi REIT for £500m
// LXi REIT is set to raise equity to fund the purchase of nearly 20 Sainsbury’s freeholds
Sainsbury’s has agreed to a £500 million deal to sell 18 of its stores to a London-listed real estate investor and then lease them back.
Real estate investment trust LXi REIT said it has exchanged contracts for the store portfolio, but that completion of the deal is dependent on it securing an equity fundraising.
LXi is in discussions with investors over a possible share sale, as well as taking on new debt, to finance the purchase.
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LXi invests in commercial real estate assets which benefit from long leases, typically lasting decades, and is a member of the FTSE-250 index.
The agreement will see Sainsbury’s sell the stores, which are prime sites located across the south of England, to LXi before renting them back.
The supermarket has already reached an agreement on an acquisition price for the 21 stores in the Highbury and Dragon investment vehicles, on which it served notice to purchase last year and earlier this year.
The grocer said the cash from the proposed sale and leaseback with LXi REIT would be used to part-fund the Highbury and Dragon deal.
Sainsbury’s has held a 49% stake in the Highbury and Dragon sites since they were set up in 2000.
The retailer said on Wednesday that both deals “would result in a broadly unchanged proportion of leasehold and freehold Sainsbury’s supermarkets, with ownership and lease structures better reflecting current market conditions and our priorities”.