Lidl has secured an offer from an investor to fund the construction of 35 stores across the UK and Europe in return for the freeholds.
The portfolio of 17 UK stores and 18 in Europe is under offer by investment group ICG for north of €250m (£215m), The Grocer understands. The deal will involve Lidl leasing the stores back once they are built.
Lidl is aiming to complete the deal this financial year, ending in February 2026.
The arrangement is similar to Lidl’s first sale and leaseback deal in the UK in October last year, in which it sold 12 stores under construction to Roadside Real Estate for £70m.
That deal has enabled Lidl to accelerate its store opening programme in the UK following a period of slower expansion that began in 2023 as its parent Lidl Stiftung grappled with soaring interest rates on debt.
Marc Houppermans, executive partner at Discount Retail Consulting, said Lidl was deploying the sale and leaseback strategy internationally across its mature European markets including the UK.
“The development is consistent in all ‘older’ Lidl countries,” he said.
“Lidl wants the large countries to continue to finance themselves with their own free cashflow, so it can focus on financing new markets in central and eastern Europe and the US.
“As Lidl also wants to expand in new countries, and borrowing has become more expensive, this is a clever solution.”
Lidl did not comment on the details of the deal.
“The qualitative and quantitative expansion of our network of stores has always been a key driver for the sustainable growth of our company,” said a Lidl International spokesperson.
“As a matter of principle, we do not focus on short-term developments, but always think long-term, economically, and sustainably. In particularly promising market situations, we consciously decide to develop properties and projects together with partners and investors.”
ICG declined to comment.
Lidl expanded across the UK taking a freehold approach to property, building and owning its own stores. The discounter has become more open to leasehold deals as a way to increase its options for sites as its footprint has edged closer to maturity.
Less than 20% of its roughly 980-store UK estate is leasehold.
It aims to open 40 new UK stores this financial year and increase the pace next year, with a UK estate of 1,500 the long-term goal.
It has also been investing in warehouse capacity. This week it announced the completion of a £285m extension of its Belvedere logistics hub, plus a £150m investment in a new Leeds warehouse, construction of which is underway. The two sites are expected to employ up to 1,000 people between them once fully operational.
Lidl, which picked up Grocer of the Year at The Grocer Gold Awards in July, has been the fastest-growing bricks & mortar supermarket in the UK consistently every month since October 2023, according to Worldpanel by Numerator. Latest data shows it is poised to overtake Morrisons as the country’s fifth-largest supermarket, with a grocery market share of 8.3% versus 8.4% in the 12 weeks to 10 August 2025. Lidl’s share has risen from 7.8% a year ago while Morrisons’ has dropped from 8.7%.
The Grocer revealed earlier this month that Lidl had already overtaken Morrisons in food and drink sales, excluding alcohol, household, toiletries and healthcare. Lidl’s food and drink market share was 7.7% in the 52 weeks to 13 July 2025 compared with Morrisons’ 7.6%, according to Worldpanel data distributed privately to supermarkets.
ICG invested £90m in UK supermarket property last year, including a Tesco Extra in Fratton near Portsmouth, a 72,000 sq ft Sainsbury’s in Hoddesdon, Hertfordshire, an Asda superstore in Clydebank, and a 40,000 sq ft Tesco in Sowerby Bridge, West Yorkshire.
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