Property firm quits flats and heads for stores

Property firm Terrace Hill is banking on the cut-throat battle for shoppers between Britain's biggest supermarkets to keep it in clover after putting all its residential assets up for sale.

The company, which has struck recent deals with Sainsbury's and Asda, now has a pipeline of store development worth £240 million as competition between grocers hots up. As well as pushing further into non-food sales, Sainsbury's is looking to expand in the North while rival Morrisons wants more stores in the South.

"This is a sector where demand from occupiers remains unabated, with all the main foodstore retailers rapidly expanding their trading footprint in the UK," the firm said.

It expects to take up to 18 months to sell its portfolio of more than 1400 flats, half of which are based in the London and the South-East. Chairman Robert Adair added: "Our capital can generate far higher returns through deployment in carefully selected commercial developments, in particular within the foodstore sector."

Writedowns on the value of the properties for sale left Terrace with pre-tax losses of £10.2 million in the year to September 30 against a £17.9 million profit previously.

The shares were unchanged at 14.88p.