Tesco to flesh out plans for property estate

The supermarket giant, which is expected to announce record profits of more than £2.2bn, is under pressure to be more creative with its freehold portfolio.

For the first time since Tesco abandoned its progressive dividend policy three years ago in favour of investing spare cash in expanding overseas, shareholders are keen to see some value handed back to them. Tesco's may dominate the UK food-retailing scene but its shares have underperformed those of its rivals.

Some analysts have estimated the group could spend up to £3bn on share buy-backs if it geared up its balance sheet. Two weeks ago, Tesco raised £100m by selling a 50 per cent stake in two of its stores to Morley Fund Management and analysts expect more deals in this vein. In the past the group has set up 50/50 joint ventures with Vincent Tchenguiz and Topland, which is controlled by Sol Zakay.

Separately, the group will attempt to win over those critical of its green credentials with a new £100m environment fund.

The money has been earmarked for testing sustainable new technologies including geothermal and solar power. It will also fund new recycling facilities, with the aim of doubling the amount of material customers bring for recycling in one of the bins in its car parks.

The group is working on plans for a new store made entirely from recycled materials. Just three of its 1,200-plus UK stores currently run on solar and wind power.