Tesco plots Thai property float

 
City A.M. Reporter
Tesco Plc (TSCO.L), the world's third-biggest retailer, plans to float its property assets in Thailand as it looks to highlight the value of its international businesses to investors.

The British supermarket group said on Wednesday the property fund had an appraised value of more than 14 billion Thai baht (293 million pounds) and would include 15 shopping malls anchored by a Tesco Lotus hypermarket.

"By releasing value from our Thai property we will be able to invest in further innovation and growth for our customers and shareholders," Finance Director Laurie McIlwee said, adding the group would continue to lease all 15 hypermarkets from the fund.

Tesco, third in annual sales behind France's Carrefour and Walmart in the US said in April it wanted a proportion of future property profits to come from overseas businesses.

The British group runs over 5,400 stores in 14 countries, including more than 800 in Thailand ranging from convenience stores to hypermarkets.

Retailers have been looking for years to extract more value from their property assets. But the process is not always straightforward and some investors are reluctant to see chains losing too much control of their buildings.

Earlier this year, Carrefour pulled plans to demerge a much larger chunk of its property assets following opposition from some investors and managers.