Morrisons May Sell 10% Of Property Portfolio

Morrisons is reported to be considering selling off up to 10% of its properties to appease sharehold…

Morrisons is reported to be considering selling off up to 10% of its properties to appease shareholders after bad tidings over Christmas trading.

The supermarket, which last week revealed a worse-than-expected 5.6% decline in sales, is set to return some of the cash pile to shareholders through dividends or share buy-backs, the Sunday Times said.

Morrisons' property empire is valued at £9 billion but as 90% is freehold owned, higher than the industry norm of 60%, there is room for the chain to sell some stores and lease them back, possibly raising £800 million.

Its coffers could also be swelled by a reduction in capital spending from £1.2 billion to £650 million a year as the industry's space race slows down.

Morrisons' chief executive Dalton Philips is to report on plans in March, after conducting a review whose findings will be of more intense interest after its recent struggles.

The Financial Times said that US hedge fund company Elliot Associates, who are stakeholders in the grocer, are pushing hard for the property shake-up.