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Property Valuation a Reason to Sell U.K. Grocers, JPMorgan Says 2014-01-23 10:41:23.820 GMT
By Heather Burke Jan. 23 (Bloomberg) -- Property valuation is a reason to sell U.K. food retailers, not buy, JPMorgan says; reiterates underweight on Tesco, Sainsbury, Morrison. * Elliott has suggested Morrison list its property co., keep 75% stake; may make similar proposals to other cos. * Supermarket property prices may drop “significantly” on: * Sharp drop expected in sector earnings * Retail property development pipeline at all time high * No shortage of planning permits * Further drop in out-of-town grocery store values as online sales growth continues * Property values given by grocers (Tesco GBP20b, Sainsbury GBP11.8b, Morrison GBP9b) are unrealistic * Loblaw’s REIT is different; Loblaw performing well, its competitors generally lease stores while Morrison’s own; Loblaw has lagged Canadian index in past 6 mos.
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To contact the reporter on this story: Heather Burke in London at +44-20-7673-2044 or hburke2@bloomberg.net
To contact the editor responsible for this story: James Ludden at +44-20-7673-2645 or jludden@bloomberg.net