Tesco has carried out a new sale and leaseback transaction worth £514m in the latest phase of its ongoing programme to release value from its UK property portfolio.

The deal will be a 50-50 joint venture with a UK pension fund. The portfolio will consist of 15 Tesco stores, accounting for approximately 75% of the transaction value, and two distribution centres, accounting for the remaining 25%.  The properties involved have a gross internal area in excess of 2.7 million sq. ft.

All properties will be leased back to the joint venture on 30-year RPI-linked leases, with an average initial yield of 5.2% for the stores and 6.3% for the distribution centres.