British supermarket chain Morrisons is considering a property-backed financing deal that could unlock up to £1bn ($1.36bn).
The grocer has asked the US-based real-estate services company CBRE to examine ways to raise funds against part of its store estate, sources told Sky News.
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According to the report, the review remains at an early stage and is not expected to involve a traditional sale-and-leaseback, a structure long used by major UK supermarket chains.
Among the possibilities being explored is medium-term to long-term borrowing secured on a selection of supermarkets.
The amount raised could reach £1bn, though neither the eventual format nor scale has been fixed.
Morrisons operates approximately 500 supermarkets across the UK and has a workforce of around 95,000.
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By GlobalDataIt was taken private in 2021 by Clayton, Dubilier & Rice (CD&R) in a transaction valued at nearly £10bn, including debt.
Results have been uneven since the buyout, and Aldi moved ahead of Morrisons last year, pushing it into fifth place among UK grocery chains by sales.
To stabilise the business and reverse the downward trend, Morrisons appointed former Carrefour executive Rami Baitieh as its chief executive in 2023.
A source cited in the report said that unlocking £1bn through a sale-and-leaseback or other leverage-based transaction would still leave Morrisons owning around 60% of its stores outright.
The retailer has been reducing borrowings taken on during CD&R’s acquisition and still has about £1bn of takeover finance outstanding.
The source added that with no near-term debt maturities, there is no immediate pressure to complete a property deal.
During the 2021 bidding process, CD&R pledged not to carry out major freehold disposals for a limited period.
Morrisons’ property activity has since largely focused on selling non-store assets.
In 2024, the group partnered with Song Capital, which paid £370m for the right to receive income from 75 supermarkets for 45 years.
Retail Insight Network has contacted Morrisons for a comment.
Last month, Morrisons reported results showing what it described as “strong” Christmas trading.
