Asda Sells 24 Stores and Depot to Blue Owl Capital in £568m Deal

British supermarket chain Asda has sold 24 stores and a distribution centre. The deal is worth £568 million and involves Blue Owl Capital and DTZ Investors. The assets will be leased back to Asda for 25 years.

This move is part of a strategy to manage the company’s significant debt. It follows a series of similar property transactions by the retailer in recent years.

Financial Strain Drives Major Asset Sale

Asda’s parent company reported a loss of nearly £600 million last year. The retailer’s market share has also continued to decline. This sale provides a crucial cash injection.

The proceeds are expected to be used to pay down debt. According to Reuters, the company’s financial health has been under scrutiny. The deal involves a long-term leaseback agreement.

All stores will continue to operate as normal. No store closures are planned as a result of this transaction. Staff and customers should see no immediate changes.

A Pattern of Property Divestments

This is not the first time Asda has sold property to raise funds. In 2021, the company sold a large portion of its warehouse portfolio for £1.7 billion. Another sale of 25 supermarkets occurred two years ago.

Each time, the retailer has leased back the properties. This allows it to continue operations from the sites. However, it increases long-term rental costs.

Analysts from the BBC have noted this pattern. They suggest it highlights the ongoing financial pressures facing the business. The company’s debt load remains a central concern.

Market Position and Future Outlook

Asda continues to compete in a tough UK grocery market. Its main rivals are Tesco, Sainsbury’s, and discounters Aldi and Lidl. Market share data shows a challenging landscape.

The company has promised aggressive price investments. The success of this strategy is yet to be seen. The retail environment remains highly competitive.

This property deal provides short-term financial relief. The long-term impact on the business strategy is less clear. The focus remains on stabilizing the balance sheet.

This £568m deal underscores Asda’s ongoing efforts to strengthen its financial footing through strategic asset sales. The transaction provides immediate liquidity but commits the retailer to long-term lease obligations, a trade-off that will define its path forward in a fiercely competitive market.

Thought you’d like to know

Which stores did Asda sell?

The company sold 24 supermarkets and one distribution centre. The specific locations have not been publicly disclosed in full. All stores will continue to operate under leaseback agreements.

What is a sale and leaseback deal?

It is a transaction where a company sells an asset and immediately leases it back. This allows the seller to free up capital while retaining use of the property. It is a common financial strategy for raising funds.

Why is Asda selling its properties?

The primary reason is to reduce the company’s substantial debt burden. The funds from the sale will be used for debt repayment. This improves the company’s liquidity position.

Will this affect Asda’s prices for shoppers?

There is no direct or immediate impact on product prices. The deal is a financial transaction related to property assets. The company’s pricing strategy is separate from its property portfolio management.

Who owns Asda now?

The majority stake is held by TDR Capital. Mohsin Issa retains a significant share and Walmart holds a minority stake. The ownership structure was finalized after the 2020 takeover.