Tesco’s discussions are a stark contrast from its indulgence in sale and leasebacks under former boss Philip Clarke who agreed £2.7bn worth of deals in an attempt to slash debt.
Mr Stewart ruled out a return to sale and leasebacks, saying Tesco was looking at buying back freeholds, which would help reduce its rent liabilities.
Mr Stewart said that Tesco plans to spend around £23m in the next two years buying back property.
The retailer is also in discussions about selling space to other retailers and restaurants, including McDonald’s, which will help drive footfall.
It also plans to deepen its ties with Sir Philip Green’s Arcadia brands, including Dorothy Perkins and Burton.
Internationally, the group has tied up with Sports Direct and H&M, which has resulted in a 28pc sales increase.
Analysts at Bernstein expect Tesco could generate around £500m in earnings from subletting space in hypermarkets.
Read the article here