Tesco has taken back full ownership of 21 superstores from property giant British Land in an effort to head off future rental increases.

The two companies have entered into a £733m property swap, with Tesco taking full ownership of a portfolio of stores and British Land gaining ownership of a collection of Tesco-anchored retail parks and shopping centres.

All the assets were previously held between Tesco and British land as a 50/50 joint venture.

Tesco explained that the 21 stores it was taking ownership of were subject to RPI-related rate increases and that the deal to bring them back under full ownership is part of Tesco’s effort to “strengthen its core UK business”.

Tesco CEO Dave Lewis said: “Last year we identified the opportunity to increase the proportion of our stores we own as freehold. This transaction with British Land allows us to increase our ownership and thereby insulate more of our businesses from indexed rent reviews. We have a long way to go but it’s a transaction which takes us in the right direction. This agreement makes our business simpler and stronger.”

In return, British Land will take over Tesco’s stake in three shopping centres, three retail parks and three standalone superstores. Tesco said it will “continue to lease the stores at these sites at market rents which are not subject to RPI-indexed increases”.

As part of the transaction, Tesco will also receive £96m from British Land.

Charles Maudsley, head of retail and leisure at British Land, added: “This mutually beneficial transaction clearly demonstrates the great relationship we enjoy with Tesco. It plays to our strengths of managing multi-let assets and gives Tesco more control of their stand-alone portfolio. We see significant opportunity to add value and drive returns through asset management and development.”

British Land said the deal further reduced its exposure to food stores and increased its exposure to multi-let retail parks and shopping centres, in line with its previously stated strategy.