If the bidding frenzy over Safeway were any indication, you'd think that big grocery stores had become luxury collectibles. Every one of Britain's top retailers--Tesco, Wal-Mart owned Asda, Morrisons and Sainsburys--are making a play for Safeway, which became a takeover target when sales started lagging at its 480 stores. But the real appeal of Safeway has little to do with the value of its stores: it's about the land they sit on. There's now so little property available for commercial development in Britain, or in Western Europe. that buying old stores is the fastest way to find space for new ones. This explains why European retail is one of the few industries anywhere on the globe that have been generating a steady stream of dealmaking buzz. At a time when global mergers and acquisitions have fallen 81 percent from a 2000 peak of $ 3.4 trillion, the Safeway deal has been generating headlines since January. The bids. which started at ￡22.9 billion, are now under review by Britain's Competition Commission, the national trustbuster. Its recommendation could decide the winner. The commercial land shortage is largely a result of the campaign to prevent the Wal-Martification of Europe. In recent years authorities have imposed stiff limits on the growth of superstores, effectively blocking the opening of new ones in countries from Britain to France, Germany and the Netherlands. Safeway has become a particularly hot commodity in part because many of its stores have the combination of size and location that big-box retailers crave. 'There are Safeway stores in this portfolio that will have directors of the other companies salivating,' says David Southwel, spokesman for the British Retail Consortium trade group. Gone are the days of the 70s and 80s, when lax zoning laws made it easy to build new stores in Britain, and towns generally welcomed the tax revenue and jobs. According to IGD, a food-and-grocery-industry drink tank, the number of superstores in Britain shot up front 403 in 1985 to 990 in 1995 but slowed the next year, after passage of new development rules. Designed to protect the economic vitality of town centers, the I996 rules require developers to demonstrate that a superstore is needed outside town, and there are no available alternatives in the center. 'Most of the zoning legislation has got the retailers by the throat,' says Haley Meyers, head of European retail research at London-based Mintel Research. In the early 1990s Tesco foresaw the end of the building binge, and began snatching up land already approved for retail development. By 'land banking' in this way. says Safeway spokesman Kevin Hawkins. big retailers could keep building through the 1990s and sidestep the red tape. But when land banks run dry. there is little choice but to buy other chains. Last October. Fretail giant Carrefour acquired a further 20 percent stake in Spain's largest retailer, Centro Commerciale Carrefour, for I billion. 'The food and general retail sector has recently seen a good degree more merger activity than other sectors,' says Tim Atten, retail analyst at BNP Paribas. 'it's difficult for these players to expand in many countries in Western Europe without buying other stores.' It's even more difficult on the Continent than in Britain. German law essentially prohibits stores larger than 1,200 square meters if local authorities object. French law requires strict reviews of stores larger than 300 square meters, and states that preserving the nation's economy, lifestyle. and culture must be weighed against any new project. 'It's virtually impossible to open a hypermarket in France,' says Johanna Waterous, director at McRinsey Consuhing. 'The planning laws in France make the ones in the U.K. look like the American Midwest.' The real megastore action is moving outside Western Europe. Tesco is now 'placing emphasis on other parts of the world,' says a spokesman. Carrefour is heading