Tesco to float Thailand real estate fund

TESCO has unveiled plans to float a property fund of 15 malls in Thailand with a value of over £300m.

The float, which is likely to be the biggest in Thailand this year, will see the Tesco Lotus Property Fund established as a standalone public listed company, with Tesco Lotus – the group’s supermarket business – leasing its hypermarket space from the firm.

It is not known what share of the fund will be up for grabs, but Tesco chief financial officer Laurie McIlwee has said that “by releasing value from our Thai property we will be able to invest in further innovation and growth for our customers and shareholders”.

The retail giant could decide to invest the proceeds in growing its business in Thailand, where it missed out on buying rival Carrefour’s Thai assets last year.

But as City A.M. revealed recently, it has also been scoping out expansion opportunities in new markets in the region and has examined a full entry strategy for Indonesia. It could also opt to establish a buying office in Jakarta to expand its supply chain.

In combination with the sale of its assets in Japan, which Tesco is exiting this year, it will have a considerable war chest at its disposal.