Tesco is in talks to sell a £400m portfolio of properties to a newly formed investment company seeking to take advantage of the opportunities of the recent falls in the value of UK commercial property.

The company, to be called Index Linked Properties, will seek investor support for an Aim listing.

It aims to acquire real estate assets at a low point in the cycle with leases that are linked to the retail prices index or that have other guaranteed uplift rent review mechanisms to provide greater certainty on future rental returns.

The company will be structured as a Jersey-based closed-ended investment company. DTZ Investment Management and Clearbrook are to manage it. Nomura and Fairfax are acting as advisers to the launch.

Financial Times