Tesco Plc (TSCO), Britain’s largest retailer, unveiled plans for 4,000 new homes across the U.K. on sites originally earmarked for supermarkets, more than a year after deciding to open fewer big stores in its domestic market.
The grocer is working on plans for the homes “either by building them ourselves or selling our sites to housing developers,” Tesco said today in a statement. Where the company has already built houses, “the feedback from local communities and councils has been very positive,” it said.
Tesco scrapped 100 major store developments in April 2013 and wrote down the value of sites that were acquired over five to ten years by 804 million pounds ($1.4 billion) to reflect a drop in property values. Instead, the retailer is focusing on the fastest-growing areas in food retailing -- online and convenience stores -- in an effort to reclaim market share lost to discounters Aldi and Lidl, and the upscale Waitrose chain.
“This looks a sensible plan and one which could win some much needed good PR, helping solve the U.K. housing shortage, with possible further developments to come,” John Kershaw, an analyst at Exane BNP Paribas in London, said in a note.
Property Week magazine reported earlier that based on an average U.K. house price of 250,000 pounds, Tesco is developing housing with a value of 1 billion pounds.
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