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Report: Asda to sell property development arm to Dubai World

Asda, the British supermarket chain owned by Wal-Mart, is set to sell industrial property developer Gazeley for more than £300m in a bid to focus on its core business.

Asda, the UK supermarket chain owned by Wal-Mart, is to sell its industrial property development arm, Gazeley, to the sovereign-wealth backed investor Dubai World.

Gazeley is set to complete the deal with Jebel Ali Free Zone (Jafza), the logistics development and business park division of Dubai World early next week, according to a report in the Financial Times. The deal is said to be worth more than £300 million ($591 million; €375 million).

Earlier this year, a Gazeley spokeswoman told PERE the company was exploring all options regarding its future direction saying: “One of them might be the sale of the business.”

Much of the value of Gazeley – which acts as a standalone company but provides Wal-Mart and Asda with distribution and storage warehouses – is its undeveloped land bank. Gazeley, formed in 1987, has more than 20 sites in the UK alone and more across continental Europe and Asia. It has a potential portfolio of 24 million square feet across 27 sites, including in India, Mexico and China.

Dubai World, the sovereign wealth fund of Dubai, has been actively investing its wealth in recent years, last year investing $100 million in Joseph Perella’s private equity firm Perella Weinberg Partners, through its investment subsidiary  Istithmar.

Jafza is a part of the Dubai-based, state-owned Economic Zones World, and according to its website is one of the world’s largest developers of logistics and industrial parks.