J Sainsbury plc announced yesterday details of a restructuring of its property function to maximise the value of its £4.5 billion UK supermarket estate. In May 2000, at the time of its preliminary results, group chief executive Sir Peter Davis announced the company intended to establish this separate business unit.
Ian Coull, group property director said: ‘We have spent the past few months scoping out the new organisation and new ways of working which will help us to accelerate our efforts to develop the potential of our estate and provide us with the infrastructure and skills to also explore the wider property markets of the leisure, residential, commercial and service sectors.
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The new organisation will comprise of three main areas in Development and portfolio planning, Delivery and Performance.
Ian Coull, said ‘This new structure and ways of working will deliver us a £35 million saving per annum in capital expenditure and we expect it to release a further £300m from the estate over the next four years through exploiting development opportunities within the existing portfolio.
‘Our supermarket estate is one of the top ten largest corporately occupied portfolios in the country. We own the freehold of over 65% of our portfolio. Historically the purpose of Sainsbury’s property function has been solely to identify and develop sites for its supermarket business in the UK. In our new role our objective is to realise maximum value from our property portfolio. This is illustrated in our recently announced plans for our Nine Elms supermarket site in London where we are seeking planning permission to develop a hotel, residential units and a leisure centre to co-exist with our existing Sainsbury’s supermarket.
‘Another aspect of more effective management of our property resources is the successful development of the ‘sale and leaseback’ schemes through which we have raised £566 million since February of this year.’
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By GlobalDataChris Fenner becomes Sainsbury’s Director of Delivery within the new structure, reporting directly to Ian Coull alongside two other senior appointments yet to be announced. He added: ‘Asset development is key to extracting real benefits from our current property portfolio. We have already announced plans for our store at Nine Elms (London) and have plans in place for similar mixed use schemes in Peterborough, Maidenhead (Berks) and High Wycombe (Bucks). The new organisation gives us the flexibility and skills to expand on this innovative approach to portfolio management.’
Editors Notes
- The restructure affects the Property, Construction and Facilities Management functions. Sainsbury’s currently employs around 140 people in these sectors of which approximately 75% are based at the company’s Head Office in London. The new organisation does not include Shaws, Homebase nor J Sainsbury Developments (developer/subsidiary).
- Sainsbury’s announced its first sale and leaseback deal in February 2000 which raised £340 million on 16 stores.
- A second sale and leaseback deal was announced in July 2000 when an additional £226 million was raised from the sale and leaseback of a further 10 stores.
- Sainsbury’s Supermarkets operates 440 stores across the UK.
