Morrisons has secured a £331m deal to tap into its property portfolio in a bid to reduce the supermarket chain’s debt.

The grocery retailer today (26 September) revealed in its third quarter trading update that it has entered a major ground rent transaction agreement with real estate investor Song Capital, expected to reduce its debt by 41%.

Under the deal, it is understood Song Capital will now pay Morrisons £331m in return for the income of 75 of the retailer’s stores for the next 45 years, however, the supermarket will still retain ownership of the shop’s freeholds.

Chief financial officer Jo Goff said: “Today we have also announced a ground debt transaction with net proceeds of £331m. The properties will remain under Morrisons control and our retail estate remains over 80% freehold.

“This transaction follows the deleveraging from the disposal of our forecourt business at the start of quarter, and if the proceeds from this transaction were also used to reduce debt, on a pro-forma basis, our debt would be £3.6 billion, down 41% from its peak.”

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The new arrangement comes three years after the supermarket giant was acquired by private equity firm Clayton Dubilier & Rice (CD&R) in a deal worth almost £10bn, including debt.

The grocery chain has since faced a series of challenges, leading to the appointment of former Carrefour boss Rami Baitiéh as its new chief executive, in a bid to turn the flailing grocer around.

Baitiéh has since implemented a series of measures as part of its transformation plans which so far appear to be successful as the company reported a “solid quarter of progress” in June with like-for-like sales up 4.1% and underlying EBITDA for the first half jumping 16% to £321m.

In April, Morrisons completed the sale of its petrol forecourts to Motor Fuel Group in a £2.5bn transaction also aimed at shrinking the group’s debt pile.