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LONDON - British retailing giant Tesco PLC is taking advantage of the strong demand for retailer real estate to raise money for its growth plans, which - in addition to the U.S. market - now include China.
According to published reports, the retailer said it wants to raise in excess of #5 billion ($9.95 billion) from real-estate sales to free up more cash to fund its growth.
Tesco plans to hold on to 70 percent of its real-estate portfolio; it currently owns more than 80 percent of the land its stores occupy.
The retailer's future growth plans, in addition to the U.S. Fresh & Easy stores it plans to open later this year, include entering Japan's convenience store market by opening 35 stores by February 2008, the Nikkei business daily reported. Tesco will become the first foreign company to directly operate convenience stores in Japan, according to Nikkei.
Tesco, which operates 3,263 stores -- from supercenters to convenience outlets - saw record profit growth during the past fiscal year, reporting a net profit gain of 22 percent to #1.89 billion (U.S. $3.79 billion). Its total sales for the year were #46.6 billion (U.S. $93.5 billion), up 11 percent from last year.