Robert Tchenguiz, the property entrepreneur who owns five per cent of J Sainsbury, is understood to be planning his next move on the UK’s third largest supermarket which today rejected attempts to hive off its property assets.

A source close to Mr Tchenguiz said today that the group is now planning its next move. He said: “We need to do some more work on it and work out a strategy around what we are going to do next.”

Mr Tchenguiz has publicly signalled his interest in the group raising funds through its real estate. It is understood that he has met with Sainsbury’s management in the past month.

It is also understood that Delta Two, a Qatari-based property investor which has a 17.4 per cent holding in Sainsbury’s, is also interested in seeing returns from the retailer’s real estate which was recently revalued and is now worth 65 per cent more than its book value.

The reaction of Mr Tchenguiz came as Sainsbury’s today pledged to retain ownership of its £8.6 billion property assets. This accompanied its full-year results, showing a 359 per cent leap in pre-tax profits from £104 million to £477 million on turnover up 6.9 per cent to £1.8 billion. Shares in the company remained static at 558p.

The retailer, which in April saw off a potential bid by a CVC-led private equity consortium, is facing pressure from shareholders to carve out its real estate assets and return the proceeds to investors.

A source declined to comment on whether Mr Tchenguiz and Delta Two had talked to each other. Together, the two own 22.4 per cent of the supermarket group, surpassing the 18 per cent holding controlled by the Sainsbury family.

However, Sainsbury's said today: "As we move from recovery to growth we believe it is right to retain ownership of our properties."

Justin King, the chief executive at Sainsbury’s, declined to say if the management had held conversations specifically with Mr Tchenguiz or Delta Two. He said: “We never comment on contact with shareholders.”

Mr King added: “We are only aware of one shareholder that has publicly stated a point of view. We have a lot of shareholders, in fact we have 120,000.”

Investors interested in Sainsbury’s real estate may also have to unravel a complex securitisation Sainsbury’s put in place early last year, when its raised £2.5 billion secured on half of its real estate portfolio.

The company will open 30 new supermarkets, 100 convenience stores and extend a further 75 outlets by 2010 as part of a new three-year strategy that will cost £2.5 billion to implement. Sainsbury’s currently operates 788 stores.

The new plan overlaps with the group’s existing "Making Sainsbury's Great Again" turnaround programme, instigated after Mr King joined the supermarket group in March 2004. It is aiming to take out £440 million in costs by next year.

The company is hoping to increase turnover next year from £1.8 billion to £2.5 billion, and by 2010, it is targeting a rise in revenue to £3.5 billion.

Over the last 12 months, like-for-like sales, which does not include revenue from new stores opened during the year, increased by 5.9 per cent for the 12 months to March 24, 2007.

Sainsbury’s attributed strong growth during the year to a number of factors including customers’ willingness to spend on healthier food and sales from its clothing and home ranges.

As part of its new three-year programme, Mr King said it is hoping to increase sales generated from its non-food products from their current 15 per cent contribution to 30 per cent by 2010.

Also, during the year, it increased its store space by 3.8 per cent, opening 20 stores, extending 18 and refurbishing a further 50 sites. Internet sales also rose, up 49 per cent.

Sainsbury’s has also succeeded in reducing its pension deficit from £431 million to £55 million, plugged by contributions from the £2.5 billion the company raised from its real estate last year.

The pension scheme is currently undergoing an actuarial review, begun in March 2006, which is expected to be completed and signed off by Sainsbury’s pension fund trustees in June this year.

But Darren Shapland, finance director at Sainsbury’s, said that new smaller deficit has been calculated using up-to-date information and expects no surprises when the pension fund review is completed next month.

Times Recommends

• Minister in talks with Saudis to protect creditors
• Premier Inn hits back in £29-a-room row
• Bankers hit back at 'populist' bonus supertax