Morrisons, the UK’s fifth-largest supermarket chain, is exploring a £1bn property deal amid its battle to recapture the ground it has lost to rivals including Sainsbury’s and Aldi.
Sky News has learnt that Morrisons, which is based in Bradford, West Yorkshire, has engaged the real estate advisory firm CBRE to evaluate options for raising finance secured against part of its large freehold store portfolio.
Sources said the process was at an early stage, but that it was unlikely to involve a conventional sale-and-leaseback transaction of the kind favoured by major grocers in recent decades.
One option expected to be considered is a medium- or long-term borrowing deal secured against a number of Morrisons’ supermarkets.
Any agreement could raise as much as £1bn, although neither the structure nor size have yet been determined.
Morrisons, which trades from approximately 500 supermarkets in the UK and employs about 95,000 people, was taken private from the stock market by Clayton Dubilier & Rice, the US-based buyout firm, in 2021 in a deal worth close to £10bn including debt.
Its performance since then has been patchy, with Aldi overtaking it last year to become the UK’s fourth-biggest grocer by sales.
In 2023, the company named Rami Baitieh, a former Carrefour executive, as its new chief executive in an attempt to arrest its decline.
Morrisons owns the freeholds to roughly 80% of its store estate, among the highest levels in the sector.
One source said that releasing £1bn of value through a sale-and-leaseback or leverage-based transaction would still leave the proportion at wholly owned stores at about 60%.
The company has been steadily paying down the debt it took on as part of CD&R’s takeover, with only about £1bn of acquisition finance left to be repaid.
Morrisons has no short-term debt maturities, the source said, meaning it was under no pressure to strike a property deal.
During a hotly contested battle to buy the supermarket chain, CD&R…
