Morrisons owners mulls £600m warehouse sale

Morrisons new owners, CD&R, are understood to be selling a selection of the group’s warehouses and food manufacturing plants, as first reported by The Sunday Times.

The grocer has hired BNP Paribas to market the assets to potential buyers.

Although interested buyers have not yet been told which buildings will be sold, the portfolio is expected to include two dozen sites worth more than £600m.

This move by CD&R comes shortly after the American private equity firm’s £7bn takeover of Morrisons won the final approval from the CMA last week.

Although CD&R committed not to “engage in any material store sale-and-leaseback transactions” after its acquisition of Morrisons, it is understood that the grocer’s freehold ownership of much of its estate was a key factor in the private equity firm’s decision to pursue the takeover.

Morrisons, which employs 110,000 staff across 500 stores and 19 food processing sites, owns 87% of its properties.

There is some speculation in the sector that CD&R’s prospective sale-and-leaseback of Morrisons’ food production arm could be part of a wider than initially planned sale of Morrisons’ properties, as the private equity firm seeks to raise capital to grapple with tough trading conditions amid the cost-of-living crisis. 

The grocer delivered the weakest performance of any British supermarket in the 12 weeks to May 15, with sales down 9.5% year-on-year, according to Kantar.

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