Sainsbury’s and Asda’s decision to merge will bring together store portfolios of 80m sq ft, and in many ways these property assets are complementary.
Sainsbury’s portfolio is weighted toward London and the South East whereas Asda has just 41 stores across Greater London compared with 57 in Lancashire alone. That’s only 7% of Asda’s stores in an area that holds 14% of the UK’s population.
There are also differences in format. Both operate large-format superstores but while Sainsbury’s has focused on physical growth through its Local convenience-store format over the past five years, Asda has rolled out a small superstore format that sits between the two, like an Aldi or Lidl.
The Sainsbury’s Local network is extensive – few can boast better – and when it comes to online link-ups this is a huge advantage. With such synergy, reflecting the evolution of supermarket retailing in recent years, we would expect little movement around these assets.
Rationalisation is clearly the area to watch. But, perhaps counter intuitively, focus shouldn’t automatically rest on poorly performing stores, particularly in areas where these retailers dominate a catchment and trade from the closed store can be expected to shift across.
A smart property team will be looking at the wider development potential of individual sites and we should expect some high-profile development opportunities to come to the market, especially for residential-led mixed-use development of first generation superstores in town-centre locations.
Chris Keen, partner, Montagu Evans
No comments yet