Tesco has announced a £733m property swap with British Land, giving it sole ownership of 21 superstores as the struggling supermarket group seeks to turn around its UK business.

The 21 superstores, valued at £352m, were part of a joint venture between the two companies, which saw Tesco making rent payments with inflation-linked increases to British Land.

In exchange for the superstores, British Land will take over Tesco’s stakes in three shopping centres, three retail parks and three standalone stores, with a total value of £381m. Tesco will continue to lease the stores at these sites at market rents. Tesco will receive £96m from the property company, reflecting the difference in values between the assets swapped.

Britain’s largest supermarket chain is overhauling its store portfolio after an aggressive expansion drive left it with too many unprofitable outlets, amid fierce competition from discounters Aldi and Lidl. Reeling from a sales slump and an accounting scandal, Tesco is shutting 43 stores including seven superstores and 30 convenience stores, and has abandoned a series of developments across the country.

Tesco’s new chief executive Dave Lewis said the property swap makes the grocer’s business “simpler and stronger”.

He said last year he identified the opportunity to increase the proportion of 3,300 UK stores owned by Tesco as freehold, which was 53% in October. “This transaction with British Land allows us to increase our ownership and thereby insulate more of our businesses from indexed rent reviews. We have a long way to go but it’s a transaction which takes us in the right direction.”

The property company, for its part, reduces its exposure to standalone food stores from 10% of the portfolio to 8%. The deal will also add £10m to 2016 profits, comprised of a £2m increase in rent and an £8m reduction in debt interest.

Charles Maudsley, head of retail & leisure at British Land, said the transaction “plays to our strengths of managing multi-let assets and gives Tesco more control of their stand-alone portfolio.”

The 21 Tesco superstores are across the UK, but Tesco did not disclose their locations. A spokesman said the deal forms part of plans to improve the company’s balance sheet. “It allows us to focus on our core business and British Land to focus on their core business.”

The grocer is giving up control of several shopping centres and retail parks where it is the leading tenant. The three malls are in Petersborough, Leicester and Londonderry, while the retail parks are in Milton Keynes, York and Bury. The standalone Tesco stores are in Southampton, Maidstone and Bromley by Bow, London.

Independent retail analyst Nick Bubb said: “Fair exchange is no robbery, but it is interesting to see the two sides. Tesco have given up control of various Tesco Extra-anchored shopping centres and retail parks and British Land are pleased that the deal further reduces its foodstore portfolio weighting and increases its exposure to multi-let retail parks and shopping centres.”

Retail analysts at Shore Capital said the “interesting” deal simplified Tesco’s business “a little”. “Whilst modest in the big scheme of things, we see this as an intelligent move with management de-risking the business a notch. The deals are further evidence of gradual improvement under Dave Lewis.”

JPMorgan Cazenove’s property analyst Tim Leckie said it is a “savvy” deal for British Land, “swapping standalone food stores for higher yielding opportunity retail”.

Sue Munden, property analyst at Panmure Gordon, previously flagged up risks with British Land’s “significant exposure to Tesco and Sainsbury superstores” (12.3% of group income), and suggested conversion to retail parks could be a long term solution. “This £733m transaction is more elegant,” she said. “The deal effectively replaces standalone exposure with multi-let and Tesco anchored shopping centres and retail parks.”

It also emerged that another Tesco executive has jumped ship. Tesco’s online managing director Simon Belsham will become chief executive of fast-growing etailer Notonthehighstreet.com.