Morrisons is in discussions with Realty Income over a property transaction worth around £600m ($803.6m) as the UK supermarket group looks to secure additional funding for its turnaround plans, according to Sky News.
US investor Realty Income is said to be one of a small number of parties holding talks with advisers to the UK-based retailer.
Go deeper with GlobalData
Discover B2B Marketing That Performs
Combine business intelligence and editorial excellence to reach engaged professionals across 36 leading media platforms.
Industry sources cited in the report said the arrangement was unlikely to follow the structure of a typical sale-and-leaseback deal and might instead take the form of financing secured against a group of the chain’s stores.
No deal is understood to be close, even though Morrisons brought in real estate adviser CBRE six months ago to examine options.
The same sources said any eventual transaction was likely to come in below the £1bn figure that had circulated earlier in the year.
Realty Income has built up a substantial presence in UK retail property, having signed multi-billion-pound agreements covering sites occupied by Asda, Tesco, Sainsbury’s and Waitrose.
Morrisons runs 500 stores across the UK and has a workforce of approximately 95,000.
The company holds freehold ownership over close to 80% of its estate, among the highest shares in the industry.
It faces no near-term debt repayments, which sources said leaves it without urgency to finalise a property transaction.
The retailer was acquired in 2021 by US private equity company Clayton Dubilier & Rice (CD&R) in a deal valued at nearly £10bn including debt; as part of that process, CD&R committed to holding off on major freehold disposals for a set period.
Rami Baitieh, who previously worked at Carrefour, took over as chief executive in 2023.
Since coming under CD&R ownership, Morrisons’ property dealings have focused on assets outside its main store portfolio.
In 2024, the retailer reached an agreement with Song Capital, under which the company paid £370m for rights to income streams from 75 Morrisons supermarkets over 45 years.
