Global alternatives investment giant Blackstone is reported to be closing on a £1.7 bn deal (€2 bn) for the warehouse portfolio of the UK's second largest grocer Asda.
The sale-and-leaseback transaction will see Asda continue to occupy the 25 properties, which are distributed nationwide, in the wake of the deal.
It is understood that the New York-based private equity group is the preferred bidder for the logistics portfolio which covers some 7 million ft2.
The sale follows the acquisition of the Asda Group by the Issa brothers in October 2020. Under the current ownership structure, the Issa brothers and TDR Capital own a majority stake in Asda, while previous owner Walmart retains an equity investment in the business and a seat on the board.
Grocery businesses have attracted renewed scrutiny from investors after outperforming during the pandemic. At the time of the Issa brothers acquisition, Asda still owned the freehold to 75% of its 639 stores, a much higher proportion than its rivals.
The new owner has started to sell off select Asda stores, with the divestment of its entire logistics facilities representing a turning point for the business.
The deal for the warehouses comes at a time when logistics property is attracting record prices. The UK is the most expensive rental market in Europe for prime warehouses, and has the largest e-commerce penetration on the continent at 24% of total retail sales, according to CBRE research.