The Issa brothers are close to selling off a large chunk of Asda’s property empire to a US investor in a deal worth £650 million.
The billionaire brothers, Mohsin and Zuber Issa – who bought the supermarket giant in 2020 – are targeting a sale of Asda’s estate to try and ease the firm’s large amounts of debt amid soaring interest rates.
According to a report from React News, a New York-based investor named Realty Income Corporation is said to be nearing a buyout of around 25 Asda stores on leases of up to 20 years.
The price tag equates to a net initial yield of about 6.5%
Realty Income Corporation bought £429m worth of Sainsbury’s portfolio as its debut UK deal in 2019. Since then, it has bought retail parks, supermarkets and logistics units in the UK.
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EG Group, which was recently bought by Asda for £2.27bn and runs petrol stations under brands including Esso, sold 415 US assets worth $1.5bn (£1.1bn) to Realty Income in a sale and leaseback deal in March this year.
The Asda owners also revealed last week that they are using the supermarket’s assets to help fund part of its acquisition of EG Group, as they look to expand their forecourt empire in the UK.
In March, it was reported that the Issa brothers are plotting an £8bn takeover of fast-food chain, Subway.
This would add to the billionaire brother’s and EG Group’s current retail portfolio, which includes food chain Leon and KFC’s biggest franchise, as well as the Group’s relations with Krispy Kreme, Greggs, Cinnabon and Starbucks.