Analysts welcomed the move, saying GUS's property assets had been under- exploited and pointing to the potential of an off-balance sheet joint venture to free cash for better-yielding projects. The deal is further evidence that new chairman Lord Wolfson is addressing every aspect of Britain's leading mail-order group.
Soon after he took control of GUS at the end of last year, he launched a pounds 1bn bid for Experian, one of America's largest business information groups. Funding its property venture with debt could realise funds for other acquisitive moves.
The proposed venture is being seen as further evidence of Mr Ritblat's entrepreneurial skills ahead of an expected upturn in the fortunes of the retail property sector. Property is widely expected to be one of the best investment asset classes this year and, on the back of the consumer boom, retail is seen as the industry's hottest area.
GUS shares jumped 14.5p yesterday to 650p while British Land closed 4.5p higher at 522p.
Neither side would give any further details of the proposed deal yesterday.