New Property Joint Venture

Tesco PLC
22 March 2004

                  TESCO ANNOUNCES NEW PROPERTY JOINT VENTURE


Tesco today announced a new property joint venture to realise around £650
million from its UK property portfolio.


Building on its own substantial experience in the retail property market Tesco
has joined forces with property group Topland in an innovative partnership that
will release funding for Tesco's further growth whilst maintaining the
flexibility to operate and adapt its property assets.


The 50/50 joint venture is one of the funding initiatives announced at the time
of the Tesco share placing in January. Together these initiatives will provide
the flexibility and firepower to expand and take full advantage of the further
growth opportunities available in all areas of Tesco's business.


Announcing the deal Tesco Finance Director, Andrew Higginson said: '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.


'Tesco will continue to operate the stores and decide on layout. This means that
we can bring our customers the very latest products and services such as new
clothing and home entertainment departments as well as new food innovations. The
success of items such as our famous £4 Value jeans proves how important this is
for customers.'


The transaction will include 33 Tesco stores and two distribution centres,
accounting for around 5% of Tesco property assets. The joint venture is for a
term 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.


ENDS



For further information:

Tesco plc:

Lucy Neville-Rolfe                                        Tel: [phone]
Steve N Butler                                            Tel: [phone]
Jonathan Church                                           Tel: [phone]


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Morgan Stanley:

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Ernst & Young

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Notes for editors:

1. The share placing announced on 13 January 2004 raised £773 million. Tesco
also announced at that time that it aimed to raise 'a similar amount' through
improvements in managing working capital and through carefully controlled
realisation of value from Tesco's property portfolio.


2.  Tesco has entered into a number of 50/50 property joint ventures in the UK
prior to this transaction:


•    BLT Properties Ltd with British Land, owning 10 properties.

•    Tesco British Land Property Partnership with British Land, owning 2  -
     properties.

•    Tesco BL Holdings Ltd, with British Land, owning 9 properties.

•    Shopping Centres Ltd, with Slough Estates, owning two properties




                      This information is provided by RNS
            The company news service from the London Stock Exchange END

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