Supermarket retailer Tesco has ruled out plans that it is to seek registration as a real estate investment trust (REIT) in the near future.
Speculation was rife following comments made by the supermarket's finance director that the retailer could look to place its £12 billion of freehold property into a REIT.
A spokesman for Tesco said that while it was looking at different possibilities and nothing was ruled out, "nothing major [is] on the cards right now". Finance director Andrew Higginson had earlier told the Daily Telegraph that Tesco was "obviously interested [in REITs] in the sense that we're a big property company".
Speculation was also fuelled after rival Sainsbury's announced last week that it had sold two mortgage-backed securities worth £2.1 billion to buy back £1.7 billion of outstanding bonds and clear its £350 million pension deficit.
Another competitor rumoured to have an interest in REITs is Marks & Spencer, though it has yet to either confirm or deny the speculations.
Tesco's denial of entering the REIT market was backed by a statement by lead managers of a recent bond issue saying that the firm had no interest in this area at the moment.
Shares in the supermarket had earlier risen by five per cent following the interview that suggested the chain may place its property into a REIT.
If Tesco does eventually decide to register as a REIT, analysts predict that it could create around £6 billion.To read more about property, click here.
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