Upmarket British retailer Liberty is selling its distinctive mock Tudor department store building in London’s West End for £41.5 million (S$87.8 million) to pay off debt, it said yesterday.
The 135-year-old firm, 68 per cent owned by property group MWB Holdings, said it had exchanged contracts to sell the freehold interest in the 125,000 square foot store on London’s Great Malborough Street to Sirosa Liberty.
Liberty will take a 30-year lease on the building at an initial annual rent of £2.1 million, with five yearly fixed rent reviews during the intervening period, it said.
Liberty said on Friday it was in the early stages of takeover talks with suitors and a spokesman yesterday said these discussions were unaffected by the deal.
Newspapers have said the most serious suitor is BlueGem Capital Partners, a private equity fund set up by former Merrill Lynch bankers to invest in mid-market companies in the UK and in Italy.
Liberty declined to comment and BlueGem could not immediately be reached.
Liberty said it would use proceeds from the sale, which reflects an initial yield of 4.8 per cent, to pay off debt and provide extra financial resources.
The freehold of the store, built in 1924 from the timbers of two ships, HMS Impregnable and HMS Hindustan, was valued at £30.25 million at Dec 31, 2009.
British commercial property values rose one per cent in January, the sixth consecutive monthly gain in capital values in a strong rebound following a 45 per cent plunge in values between June 2007 and August 2009, Investment Property Databank data showed last month.
Liberty said the deal depended on approval by MWB and investors owning about 33 per cent of that company had confirmed their support.
Liberty shares were up 2.54 per cent at 295 pence yesterday morning. MWB was down 1.1 per cent at 45 pence.
Liberty was advised by Knight Frank and Sirosa by Savills.
Source : Business Times – 16 Mar 2010
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