Asda is planning to raise around £400m from the sale and leaseback of 20 supermarkets to help fund its turnaround plan.

The grocer has appointed property advisor Eastdil Secured to sell the stores, which it plans to lease back over the next 20 years, Green Street News reported.

An Asda spokesman said: “Sale-and-leasebacks have been a feature of the retail industry for many years.

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“While maintaining a strong freehold base remains central to Asda’s property strategy, we will consider suitable opportunities to unlock value from our property portfolio as part of our material programme of investment into the business.”

The potential sale and leaseback deal follows the return of Asda’s former chief executive Allan Leighton in November. He is tasked with reviving the supermarket’s ailing fortunes.

Leighton warned that the grocer’s profits will suffer a “material hit” this year as the business ramps up spending on price cuts, improving the availability of products and refreshing its store estate.

It is not the only grocer to have sought a sale and leaseback deal, with John Lewis Partnership offloading a dozen of its Waitrose supermarkets for £150m in 2023. Sainsbury’s sold and leased back some of its supermarkets for £500m in 2022.