Tesco has divested assets in South Korea to investment consortium IGIS Asset Management.

Its discount retail chain Home Plus, has sold four stores and associated mall space to IGIS Asset Management in a deal worth more than £300 million (US$473.94 million).

The transaction highlights Tesco’s strategy to release value from its international property portfolio.

Home Plus has more than 450 stores in South Korea and employs over 27,000 people. It operates both hypermarkets and express formats as well as a home delivery shopping service.

Tesco has slashed its profit forecast in South Korea following new legislation which prevents large stores from opening on two Sundays monthly. Sundays are the most profitable days for retailers in South Korea.

“With store closures now required on two Sundays each month, the key shopping day in the country, plus restrictions on 24-hour opening, business at the large stores of Home Plus and the other major players such as E-Mart and Lotte is negatively impacted,” said analyst Clive Black of Shore Capital.

GB