Morrisons and Realty Income discuss a £600m property financing deal, Sky News reports. The structure likely avoids a sale-and-leaseback. CBRE advises the UK grocer, which faces no near-term debt pressure. AlphaScala rates Realty Income at 49 (Mixed).
Morrisons is in talks with Realty Income about a property financing deal worth roughly £600m, Sky News reported. The discussions come as the UK supermarket chain seeks additional funding for its turnaround plan.
The structure would differ from a typical sale-and-leaseback, industry sources told Sky News. It might instead take the form of financing secured against a group of stores. Realty Income is one of a small number of parties holding talks with advisers to Morrisons, the report said.
No deal is close, even though Morrisons hired real estate adviser CBRE six months ago to examine options. The eventual transaction is likely to come in below the £1bn figure that circulated earlier this year, the same sources said.
Realty Income has built a large UK retail property portfolio, with multi-billion-pound agreements covering sites occupied by Asda, Tesco, Sainsbury's and Waitrose. The US investor's Alpha Score of 49, labeled Mixed, reflects the mixed outlook as it expands grocery exposure, according to AlphaScala data.
Morrisons runs about 500 UK stores and holds freehold ownership over nearly 80% of the estate, among the highest shares in the industry. The company faces no near-term debt repayments, leaving it without urgency to finalise a property transaction, sources said.
Private-equity owner Clayton Dubilier & Rice acquired Morrisons in 2021 for roughly £10bn including debt. As part of that process, CD&R committed to holding off on major freehold disposals for a set period. Rami Baitieh, formerly at Carrefour, took over as chief executive in 2023.
Since the CD&R takeover, Morrisons' property dealings have focused on assets outside its main store portfolio. In 2024, it paid £370m to Song Capital for rights to income streams from 75 supermarkets over 45 years.
The retailer's high freehold ownership and lack of immediate debt maturities give it negotiating room, the sources said. Any deal with Realty Income would add to the US investor's growing UK grocery footprint.
Drafted by a large language model from the source reporting linked above, then screened by automated publishing checks. It is not read by a journalist before publication. Some articles cite our Alpha Score. Verify prices and figures against the original source. Educational coverage, not personalized advice.