The deal allows Tesco to release funds from its property portfolio

The deal with property group Consensus, owned by Iranian-born entrepreneur Vincent Tchenguiz, involves 12 Tesco stores and two distribution centres.

Tesco said the move would give it "further flexibility and firepower" to take advantage of growth opportunities in all parts of its business.

The 50/50 joint venture has been agreed for a term of 27 years.

However, the agreement includes an early termination option for 2015.

Improvements

"This latest joint venture allows us to release funds efficiently from our valuable property portfolio and at the same time remain free to improve the stores for our customers by extending or remodelling them," said Tesco finance director Andrew Higginson.

The supermarket has not revealed which of its properties are involved in the deal, but said they made up 1.5% of its property assets by floor area.

The move follows a number of similar deals by retailers in recent years. Tesco itself has agreed similar deals with companies including British Land, Slough Estates and Topland.

Mr Tchenguiz made his name with brother Robert through setting up property group Rotch. The group now has real estate assets of more than �4bn.