New Property Joint Venture

Tesco PLC
21 March 2007


                    TESCO ANNOUNCES NEW PROPERTY JOINT VENTURE
 

Tesco today announced a £650 million property joint venture with British Land,
an existing partner in a number of other property transactions.

The deal will generate Tesco net proceeds of £570 million, with recognised
property profits of £142 million. The 50/50 joint venture enables Tesco to
release funding for its future growth, whilst maintaining the flexibility to
operate and adapt its property assets.

This partnership is the second phase of the property sale and leaseback
programme announced in April 2006, and follows a transaction with British
Airways Pension Fund, announced in January 2007, which raised proceeds of £445
million.

The joint venture takes advantage of attractive conditions within the debt and
equity markets, being reflected in an initial yield of less than 4.5%. The sole
debt provider was Goldman Sachs International.

The transaction includes 21 Tesco stores, accounting for approximately 3% of
Tesco UK property assets by square footage. The joint venture is for a term of
20 years with an early termination option in 2017. Annual rental uplifts are
linked to a limited prices index calculated by reference to RPI, collared
between zero and 3.5% per annum.




Contacts:

Investor Relations:     Chris Griffith          01992 644 116
Press:                  Jonathan Church         01992 644 645
                        Angus Maitland          020 7379 5151

 

 




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