PracticeConsultingSelfridges looks at off-balance sheet assets after Land stake

Selfridges looks at off-balance sheet assets after Land stake

Speculation mounted this week that Selfridges would join other retailers in taking its property assets off balance sheet, after property dealer British Land bought a 3% stake in the Oxford Street retailer.

The British Land deal covers property thought to be worth around #383m.

It has recently struck similar joint-venture deals with retailers Tesco and Sainsbury. Last February, British Land and Tesco entered into a property partnership covering retail and business sites.

The deal comes just over one month after Selfridges’ demerger with Sears Group.

Peter Williams, finance director of Selfridges, told Accountancy Age: ‘We haven’t been approached about taking the property assets off the balance sheets and now isn’t the right time. None of our shareholders has called for property assets to be taken off the balance sheet. However, it isn’t ruled out.’

Rob Oldham, real estate consultancy head at Ernst & Young, said: ‘It’s getting more difficult to transfer property assets off the balance sheets and into a joint company. There must be an ulterior motive for the deal, such as releasing assets tied up in property that are expensive to manage.’

He added that more and more UK companies were releasing surplus property assets which were peripheral to the business. ‘One major UK bank has 500 more branches than it really needs.’

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