Morrisons begins plans to sell and lease back five supermarkets

CD&R, Morrisons’ parent company, is reportedly looking to sell and lease back five of the supermarket brand’s stores in a bid to raise cash as a result of uncertain economic conditions. 

The news follows an announcement earlier this month that Morrisons was set to be hit by £95m in borrowing costs as its debt rises, as it has been estimated that the supermarket brand could reportedly see its annual interest payments rise from £35m to £335m, on top of its current £6.6bn debt total.  

It is reported that if the former-Big Four grocer goes ahead with its plans to sell, it would be the first deal the brand has undertaken since opening over 100 years ago. 

According to The Sunday Times, BNP Paribas property agents are currently scouting for buyers on behalf of the company. The stores will come with 20-year leases and rent uplifts subject to inflation. 

In addition, CD&R is reportedly planning to sell and lease warehouses and food manufacturing sites. 

The move is thought to follow CD&R winning a £7bn auction for the supermarket last year, with the Competition and Markets Authority approving the deal in June 2022. 

CD&R told the Sunday Times that the “mooted store” disposals only represented 1% of Morrisons’ supermarket portfolio. 

Currently, Morrisons reportedly owns 86% of its 497 supermarkets, which is said to be more than any of its competitors.