Morrisons has struck a property deal with Song Capital to shrink its debts

The retailer has agreed a ground rent deal with an investor that would wipe £331m off its debts, releasing value from 76 of its supermarkets. 

The deal is expected to complete on 2 October, subject to conditions and would see an investor pay the sum for the right to receive an income stream from the stores for the next 45 years, while Morrisons retains ownership of the freehold. 

Morrisons did not reveal the investor it had partnered with, however a report by Sky News claims the deal is with real estate investor Song Capital.

Morrisons was taken private by private equity giant CD&R in 2021. Last year, its finance costs were £735m – up from £593m the year before. About £400m of that reflected annual interest payments on the grocer’s borrowings, which stood at £5.4bn. 

Morrisons, which lost its place as a big four grocer to Aldi two years ago, is in the midst of a turnaround programme spearheaded by new chief executive Rami Baitiéh who has sought to put the customer at the heart of the business.