Tesco says will own most of its property

BARCELONA, Mar 28 (Reuters) Tesco is reviewing its real estate portfolio while raising 5 billion pounds (.8 billion) from its property assets, but the world's fifth largest retailer will always own most of its space, its chief executive said on Wednesday.

''Tesco has a lot of property, but it is important to remember property ownership is an integral part of retailing and Tesco will always have a majority of its space as owned space,'' CEO Terry Leahy told Reuters in an interview at the World Retail Congress.

Retail property has come into investors' focus since a private equity consortium revealed it was considering a bid for Britain's third largest supermarket group J. Sainsbury last month. A sale and leaseback for its at least 7.5 billion pounds ( billion) worth of property is expected to be the engine of any deal.

Tesco is one of Europe's largest property owners, with an estimated nearly 20 billion pounds of real estate in 13 countries.

Leahy said Tesco would continue to review its real estate assets given changes in the ''appetite'' for owned property and different kinds of financing, but declined to say whether he planned to expand the programme.

''We always keep it under review which is the thing to do with property ... but at the moment we are busy executing the programme. It is very successful,'' Leahy said.

He added Tesco had ''no plans'' to revalue its property on its books following the surge in real estate prices and private equity interest in the sector.

''We don't revalue our property...It is probably more meaningful to do as we are doing, which is to actively trade our properties to establish their true worth in a real market,'' Leahy said.

NO TIMETABLE FOR INDIA Tesco would consider long-term financing again after the issuance of its 50-year bond last year, Leahy said.

''It seemed to be successful programme and there was appetite for it,'' he said.

Tesco, like international rivals Wal-Mart Stores Inc. and France's Carrefour, is raising funds to take part in a retailers' land grab that spans emerging economies to the United States.

Wal-Mart beat Tesco to a retail partnership with Bharti Enterprises last year. Tesco remains outside the fast-growing economy where foreign multibrand retailers need a domestic partner to enter.

''We are still considering what to do in India. We do obviously require a partner there if we were to invest in India and there are plenty of very good business and people in India,'' Leahy said.

There was ''no point being held to dates or a timetable'' with regard to entering India, he added.

More advanced is Tesco's much anticipated, but highly secretive expansion in the United States slated for the autumn where it will compete withn Trader Joe's convenience stores and a lower price version of Whole Foods Market.

Some analysts have speculated Tesco will need to roll out upwards of 300 U.S. stores in its first year to be able to compete. Leahy declined to give numbers but said he would be ''rolling out fairly quickly''.

REUTERS CS HT1807