The new venture will own 33 Tesco stores and two distribution centres and has a lifespan of 25 years with an option to review in 2011. Under the agreement Tesco's rent liability will be subject to pre-agreed rents, avoiding the risks of significant rent increases often associated with open market rent reviews
Tesco finance director, Andrew Higginson says: "Tesco has always proactively managed its property portfolio, maintaining a mix of freehold and leasehold properties and operating a number of successful property joint ventures. This latest joint venture with Topland builds on this experience and provides Tesco with a flexible arrangement which allows it to run stores in the best way for customers and in the most cost effective way for the business."
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