New property joint venture

Sainsbury(J) PLC
26 March 2008



26 March 2008


Sainsbury's forms £1.2 billion property joint venture with British Land



•  £273 million investment to create a 50:50 Joint Venture with British Land (1)

•  Securitised Joint Venture owns 39 retail sites with a value of £1.2 billion 
   (2)

•  Transaction unlocks significant development potential and value creation


Sainsbury's today announces an investment of £273 million to create a 50:50
Joint Venture ('JV') with British Land (1).  This securitised property JV holds
39 stores, including many of Sainsbury's most important stores (2), with a
valuation of £1.2 billion, representing a net equivalent yield of 5.1 per cent.
British Land's existing £722 million of outstanding securitised third party
debt, at a fixed interest rate of 4.96 per cent and average life of 12 years,
will be retained by the joint venture (3).


Creation of this JV unlocks the opportunity to significantly develop these
stores and deliver an improved customer offer.  The JV will seek to maximise the
full potential of these development opportunities, including extending up to 25
sites by an estimated 500,000 sq. ft. of net selling area (4).  Sainsbury's will
benefit from both the enhanced trading performance of the extensions as well as
retaining a share of the increased property value.


This transaction is in line with Sainsbury's active property management strategy
of increasing its control over key trading assets with significant development
potential whilst disposing of fully developed mature assets.  The initial term
of the joint venture is 10 years and after this term Sainsbury's retains an
equal degree of control over the ongoing ownership of the properties.


The investment will initially be funded from cash and existing facilities
available to Sainsbury's.  Over the medium term the transaction will be funded
by the continuing sale of Sainsbury's mature assets.  The transaction will be
earnings neutral in the current financial year (5) and the additional trading
and property value will be accretive to earnings in future years.


Justin King, chief executive, said:  'This venture is an excellent opportunity
for Sainsbury's to increase our interest in the future extension and development
of many of our most important stores.  This will enable us to enhance the
customer offer, increasing both the trading and property value of these assets.
This transaction sits within Sainsbury's strategy to actively develop the
property estate and we are delighted to be working alongside British Land to
deliver these development opportunities.'


Enquiries:

Investor Relations                           Media

Elliot Jordan                                Pip Wood

[phone]                         [phone]


Notes

(1)      Total investment of £273 million including transaction costs and fees.
The JV has an initial life of 10 years and the net asset value for the JV is
£544 million.

(2)     The JV owns 38 Sainsbury's stores and one Waitrose store.  The total net
selling area of the 38 Sainsbury's stores is 1,359,000 sq. ft., accounting for
8.1 per cent of total supermarket estate as at 6 October 2007.

(3)     The JV is securitised with long-term debt fixed at 4.96 per cent.  Debt
repayment is fully amortised by 2025.

(4)    Subject to planning consent and regulations.

(5)    The JV is earnings neutral for J Sainsbury plc in the 2008/09 financial
year, as the cost of interest in relation to the investment is offset by its
share of the JV rental income.

(6)    The creation of this JV will be disclosed as a non-adjusting post balance
sheet in the J Sainsbury plc financial statements for the 52 weeks ended 22
March 2008.  The Joint Venture will be equity accounted from 25 March 2008.

(7)     This JV is the second significant Sainsbury's property JV.  The Harvest
JV with Land Securities was established in November 2007.

(8)    As at 24 March 2007, Sainsbury's owned 286 freehold and long leasehold
supermarkets, representing 62% of the supermarket estate net selling area.





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