Sale and leasebacks by Asda, Morrisons and Lidl drive near record investment

Nearly £1bn worth of sale and leaseback deals by Asda, Morrisons and Lidl drove close to record-high investment in supermarket property in 2025.

The three supermarkets struck sale and leaseback deals totalling £943m, according to Colliers.

The property consultancy’s latest annual grocery real estate report said it drove near record levels of investment in food store property of £1.87bn, well ahead of five and 10-year averages.

Asda was the most traded food store operator, accounting for 31% of transactions. It raised nearly £570m from three sale and leaseback deals as its private equity owner TDR Capital continued to use property assets to generate cash and manage its debt position. Despite moderate success in reducing the debt, it remained a “millstone” for Asda, which was limiting its ability to invest in stores and having knock-effect on sales, the report said.

Morrisons accounted for £280m in property deals, some 15% of total transactions, including a £200m sale and leaseback portfolio as owner Clayton Dubilier & Rice actively reduced debt.

The report said Morrisons was also looking for expansion opportunities. “Whilst it did not open any new supermarkets in the last 12 months, we understand that expansion may now be back under consideration at a limited scale,” said Greg Styles, Colliers head of retail development and advisory.

“With around 500 supermarkets in the UK, Morrisons has a range of areas where it has ’white space’ that would allow it to expand if the right opportunities presented themselves.”

Morrisons is also planning to launch about 250 Morrisons Daily convenience stores with franchisees, as reported by The Grocer in October.

Lidl sold 17 UK stores in construction to ICG, a deal The Grocer revealed was close to being signed in August. The portfolio also included 18 stores in Europe.

Lidl is currently marketing a second portfolio of 18 stores in construction across Europe to ICG, according to Colliers.

Lidl began seeking investors to pay for its new UK stores, which it then leases back, in 2023.

Styles said: “Whereas Aldi’s expansion is funded by the resources of the family who own the Aldi Süd global business, Lidl UK seems to need to self-fund new store openings.

“Whilst this model of funding new openings may not be the choice of other operators, and it may lock in occupational cost increases for the Lidl UK business, it seems to be succeeding in helping it to sustain a rapid growth programme.” 

Lidl opened its 1,000th UK store in November. It also reached the landmark of matching Morrisons’ market share in new Worldpanel data this week, to become the joint fifth-largest UK supermarket.

Sainsbury’s was due to have opened 10 new supermarkets by the end of February 2026, ranging from a 9,000 sq ft one in Yatton in Somerset to a 30,000 sq ft superstore in Wynyard, County Durham.

The new stores include three Co-op aquisitions and two of the 10 former Homebases Sainsbury’s bought in 2024.

Sainsbury’s is now targeting a pipeline of 14 new store openings in the 2026/2027 financial year, the majority to come from the Homebase acquisitions.

Tesco opened three new stores in 2025. They include a low-carbon, timber-framed concept store in Harrogate, North Yorkshire, which has “almost has a discounter feel and perhaps signposts where Tesco see its main competition in the future”, said Styles.

FTSE-listed Tesco and Sainsbury’s stores remain more desirable to investors than Asda and Morrisons, according to the report, which forecasts grocery will continue to be a safe haven in uncertain markets.

Waitrose’s deals included its purchase of the 54,000 sq ft Hersham Green Shopping Centre in Surrey. Bought to safeguard its own store, it also gives Waitrose 16 other shop units to manage. Waitrose is now looking for new supermarket opportunities, alongside its targeted 100 new convenience stores across the UK over five years, as previously reported.

Styles said: “Looking to the next 12 months, the continued rapid growth of Aldi and Lidl seems certain as they pursue their objectives of greater store numbers across the UK.

“Sainsbury’s and M&S will open a good number of supermarkets, and Tesco will infill where the right opportunity arises.

“Morrisons may well be back opening a few new stores as they look to build out some existing sites and seek good new opportunities, but no new supermarkets are expected from the troubled Asda business.”