The backers of retail group Superquinn are in talks with lenders following the huge decline in the value of its property assets, according to industry sources.

Select Retail Holdings has held meetings in recent days with its banks after latest accounts for its subsidiaries showed the value of the retail group's properties had fallen by more than €235m since the property downturn. The group had already sold several shops to Friends First for €142.5m.

Select Retail Holdings is a consortium that includes property developers Bernard McNamara and Jerry O'Reilly and property consultants David Courtney and Bernard Doyle. It bought the retail group in 2005 for about €420m.

The latest grocery market figures from Kantar Worldpanel Ireland, for the three months to the end of October, showed that Superquinn's share of the grocery market has dropped to 6.5%, as sales fell by 2.9% in the past 12 weeks.

Superquinn, whose executive chairman is Simon Burke, said it has been trading strongly in recent weeks. It recently lured Andrew Street away from rival Dunnes to become its chief executive.

Sainsbury's has previously expressed interest in buying the group, which has shops in affluent suburbs of Dublin.