The UK foodstore investment market recorded c.£1.87 billion of capital transactions in 2025, up from £1.29 billion in 2024 and ahead of both the five (£1.59 billion) and ten (£1.52 billion) year averages, according to Colliers’ latest UK Grocery Report.
Volumes have increased as a result of continued sale and leaseback activity from Asda and Morrisons who are using the capital raised from these transactions to reduce leverage; and Lidl, the fastest growing grocer in the UK, funding store expansion. Altogether, some £943 million of sale and leaseback deals in five portfolios were completed, close to the £1.01billion recorded in 2023.
Institutions (51%) and REITs (34%) led buying activity, underlining supermarkets’ safe‑haven status amid a constrained supply of prime stock.
On the operator side, Asda emerged as the most traded grocer, responsible for 31% of all deals, while Tesco bucked the wider trend by buying £127.8 million of its own stores – including two of the five largest single asset deals in 2025, both of which Colliers advised on.
Mark Girling, Executive Director at Colliers commented: “Supermarkets again proved to be amongst the UK’s most sought after secure income real estate in 2025. With nearly £1.9 billion traded and buyers skewed to institutions, private capital and REITs, the sector’s defensive, often index‑linked cashflows remained in demand despite a challenging macro backdrop. We expect continued, but slowing yield compression this year for best‑in‑class assets driven by a chronic stock shortage and a flight to safety provided by grocery assets, the ultimate essential retail subsector.”