It said an independent valuation of just 201 of its 479 stores put the real estate value at £4.5bn, almost £2bn or 184p per share higher than their current net book value.
The remaining 278 stores have a current book value of £962m and non-store assets have a book value of £565m.
This would give the company's property portfolio a net value of £4.13bn or 391p per share — well above its current market value of about £3.4bn for the entire company.
Safeway shares immediately jumped by 15p at the news to 330p at the news.
“This property valuation, with its £2bn surplus, underlines the substantial value within Safeway's store portfolio,” said Safeway’s chairman David Webster.
“We would expect our shareholders to benefit from this under the terms of any proposal,” he added.
The statement added that Safeway had planning permissions that would allow for the creation of another 27 hypermarkets and for 36 other extensions, which will increase sales area by over 700,000 sq ft.