Adds further details from the report and background

July 13 (Reuters) - British supermarket group Morrisons is in talks with a number of parties, including U.S.-based Realty Income O.N, for a £600 million ($802.98 million) real estate deal, Sky News reported on Monday, citing industry sources.

• The deal is unlikely to be structured as a conventional sale-and-leaseback deal, but can instead involve financing tied to a portfolio of the retailer's stores, Sky reported.

• The grocery chain store previously engaged real estate advisor CBRE CBRE.N to evaluate options to raise up to £1 billion against part of its freehold store portfolio, Sky had reported in February.

• The sixth-largest UK grocer has been focused on streamlining its operations as it grapples with an increasingly competitive domestic retail sector and lower consumer spending amid rising energy prices from the U.S.-Iran war.

• The chain, owned by U.S. private equity firm Clayton, Dubilier & Rice, lags peers Tesco TSCO.L and Sainsbury's SBRY.L as well as discounter Lidl, which recently overtook it to become Britain's fifth-biggest grocer, according to industry data.

• Morrisons, Realty Income and CBRE did not immediately respond to Reuters' request for a comment.

($1 = 0.7472 pounds)