Property News - Sainsbury's to relinquish property and trading arm

Sainsbury's has raised a 'for sale' sign over its specialist property trading and development arm J Sainsbury Developments.

JSD was created by Sainsbury's to focus on general property development, often unrelated to Sainsbury's own store portfolio. It has developed more than 300,000 sq m of space in the 10 years it has been trading.

The portfolio of about 20 projects - including Lemon Quay at Truro in Cornwall; a minority interest in the Brewery at Romford and the Cuckoo Bridge Retail Park at Dumfries in Scotland - had a book value of£141 million at March 30 last year.

A separate company - Sainsbury's Property Company - acts as a service company to the main business, upgrading and extending existing stores.

Although it is a significant player in property terms, JSD is a relatively small part of the Sainsbury's group. In the 12 months to March 30 last year, JSD contributed an operating profit of£15 million, just 2 per cent of the Group's total operating profit of£679 million.

Sainsbury's director of property planning and development Simon Webster said: 'Sainsbury's is in a period of intense store expansion and improvement, being delivered through a multi-format strategy that allows us to develop our formats to meet the needs of customers in local markets.

'This expansion is in support of Sainsbury's business. JSD has developed into a successful property trader-developer, delivering schemes that mostly do not relate to Sainsbury's supermarket business, so it is an appropriate time to consider a disposal.'

Jones Lang LaSalle has been retained as marketing adviser for the sale.