Tesco is planning to turn some of its largest urban supermarkets into mini-Tesco villages containing hundreds of homes as it looks for new ways to raise cash to fund a giant turnaround.
As part of a radical strategy devised by chief executive Dave Lewis, Britain’s largest supermarket chain is working on a bold plan to overhaul its vast store estate, which analysts say could raise £1.5bn.
A scheme with property developers to build hundreds of flats on top of its superstores and sprawling store car parks is central to the proposals.
According to Alan Stewart, Tesco’s chief financial officer, the sale of Tesco’s so-called “air rights” could generate around £400m.
The plans have added appeal because they could provide a solution to Britain’s housing crisis. A further £1bn-plus is expected to be raised from offloading land and excess space in its stores.
After Tesco’s wage bill, its stores are the highest source of costs, thanks to rising rents and business rates.
The Sunday Telegraph has learnt that Tesco and other major supermarkets are in discussions with property developer Apex Airspace about building homes on top of their stores. Tesco has already identified 15 sites, most of which are in London, with another in Oxford.
Air rights, a relatively new concept in property circles, involve selling the rights to build over retained land on a long leasehold basis.
Typically, flats are built on top of existing buildings. Recent developments have involved flats being constructed offsite, then crane-lifted into place on a building. e: From factory floor to finished flat
Mr Stewart admitted planning authorities could delay complex schemes, but stressed that the idea would not involve Tesco investing more cash.
Original link - Telegraph
