SUPERMARKET giant Tesco has sold its shares in Clifton Moor retail park as part of a shake-up of its property portfolio.

The move is part of a deal with property investment company British Land, which previously shared ownership of part of Clifton Moor with the retailer.

The agreement sees British Land take full ownership of the 240,000sq ft site in York, with Tesco becoming a tenant, leasing back its Clifton Moor Tesco Extra store and petrol station.

Clifton Moor is one of a number of retail parks involved in the deal, which has seen British Land take Tesco's half-share in two portfolios, made up of three shopping centres, three retail parks and three standalone stores.

In exchange, Tesco has taken sole ownership of 21 other stores across the country as well as a £96 million cash sum from British Land.

The deal, which has seen a £733 million exchange of properties, was instigated by Tesco in a bid to lower its rent costs.

The retailer now not only owns more stores outright, but the sites transferred to British Land will be leased back at market rates, rather than being subject to RPI-indexed increases, as the 21 stores in the deal had been.

Dave Lewis, chief executive of Tesco, said: "Last year we identified the opportunity to increase the proportion of our stores we own as freehold.

"This transaction with British Land allows us to increase our ownership and thereby insulate more of our businesses from indexed rent reviews.

"We have a long way to go but it's a transaction which takes us in the right direction. This agreement makes our business simpler and stronger."

Alongside Clifton Moor, British Land has taken ownership of two retails parks in Milton Keynes and Bury, as well as shopping centres in Peterborough, Leicester and Londonderry.

Charles Maudsley, Head of Retail & Leisure, British Land, said: "This mutually beneficial transaction clearly demonstrates the great relationship we enjoy with Tesco. It plays to our strengths of managing multi-let assets and gives Tesco more control of their stand-alone portfolio.

"We see significant opportunity to add value and drive returns through asset management and development."