Asda owners Mohin and Zuber Issa are reviewing the Big 4 grocers £8.6 billion property estate in a bid to reduce its growing debt.
The billionaire brothers are set to target the sale and leaseback of the supermarket’s sites to tackle rising interest bills.
According to reporting by The Telegraph, market sources have said that property experts were called in to assess the prospects of Asda’s estate, with freehold properties valued at £8.6bn in its 2021 annual report.
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A sale and leaseback of Asda’s properties could help to pay off the businesses debts, which have worsened amid the cost-of-living crisis and rising interest rates.
However, this could also result in having to pay higher rent in exchange for reducing interest payments.
In January, the Issa Brothers proposed a potential merger of Asda with the UK arm of EG Group which would see the company combine its petrol and supermarket divisions and value the business at £12bn.
However, trade union GMB said this would “raise the spectre of a private equity black hole on the UK high street.”
Commenting on the property review, an EG Group spokesperson told The Telegraph: “We are pleased to have various options available and consider the merits of each to underpin our long-term strategy.
“EG Group continues to make good progress across all areas of its business and this week announced a highly resilient financial performance in 2022 – despite macro-economic headwinds.”
This news comes as the Issa Brothers have agreed on a $1.5 billion sale and leaseback deal across a proportion of EG Group’s US property portfolio.
EG Group has sold 415 stores on the US east coast to property company, Realty Income, which represents around 15% of its property empire, and will lease the assets back for a $103m (£85m) annual rental fee.
