Morrisons is weighing a fresh property deal with Realty Income that could raise about £600m, and the talks are being watched closely because they may help fund the supermarket chain’s wider turnaround push. The structure under discussion sounds a little different from the usual quick sale-and-leaseback move, which suggests both sides are trying to find a setup that gives Morrisons cash without giving away too much flexibility.
The US real estate investor is reportedly one of a handful of parties in the mix, with advisers on the Morrisons side exploring options rather than racing toward a done deal. That matters, because when a company is not under immediate pressure, it can afford to shop around for terms that fit its long game instead of taking the first offer that lands on the table.
People familiar with the talks say the idea may involve financing secured against a selection of Morrisons stores rather than a full-blown property sale. In plain English, that means the chain could unlock money from its estate while still keeping the core business running in a way that does not feel like a fire sale.
Realty Income is no stranger to British retail property. The company has already built a big footprint in the UK through large deals tied to stores operated by Asda, Tesco, Sainsbury’s and Waitrose, so this kind of transaction would fit its playbook pretty well.
Morrisons, meanwhile, is a major operator with around 500 stores and roughly 95,000 employees, which makes its property estate a serious financial lever. It owns close to 80% of its freeholds, a high share for the sector, and that gives management more options than many rivals have when they need to raise money.
The supermarket is not staring down a debt wall either, so there is no obvious deadline forcing a rushed transaction. That breathing room can be useful, but it also means any financing package has to make strategic sense, because Morrisons is not negotiating from a point of desperation.
The chain was bought in 2021 by Clayton Dubilier & Rice in a deal that valued it at nearly £10bn including debt, and that ownership change still shapes how the business handles its property assets. As part of that acquisition, CD&R agreed to hold off on major freehold disposals for a period, which helps explain why any move now is being handled carefully.
Rami Baitieh, the chief executive who took over in 2023 after a career that included time at Carrefour, has been steering the business through its next phase. Under his leadership, Morrisons has leaned on property-related arrangements outside the main store estate, rather than stripping out the heart of the business.
That approach showed up in 2024, when Morrisons struck a deal with Song Capital that brought in £370m in exchange for rights to income streams from 75 supermarkets over 45 years. Deals like that can be attractive because they create immediate funding, but they also come with a long shadow, since future income gets traded for money in hand today.
If the Realty Income talks move forward, the final shape will matter a lot. A deal that taps selected stores for funding could give Morrisons room to keep pushing its turnaround, while Realty Income would get another foothold in a market it already knows well, which is exactly the kind of transaction that tends to keep both real estate people and retail watchers busy.
