Asda’s private equity suitors battle for ‘air rights’ above supermarkets – reports

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Asda could be bought by a US private equity group that sees untapped value in developing flats and offices above the group’s supermarkets.


Lone Star Funds has been reported to be one of the suitors of the Walmart-owned grocer, but may just be interested in its ‘air rights’.


Air rights are the area directly above a property, which the owner has the right to develop.


Apollo Global Management and TDR Capital are two other private equity groups thought to be looking to buy a large stake in Asda, which parent Walmart has put up for sale.


Asda’s advisers at Rothschild have received three bids for the grocer, the Times reported.


Already in the UK supermarket sector, Sainsbury’s (LON:SBRY) netted a GBP95mln profit from redeveloping two stores in south London in partnership with Barratt Developments PLC (LON:BDEV), while Tesco (LON:TSCO) has developed mixed-use buildings on top of several stores in the capital as part of a plan to potentially generate GBP400mln from its air rights.


One property sector analyst calculated that 150,000 homes in London could be built above or alongside stores.

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