Ted Baker has sold its headquarters, the Ugly Brown Building in Kings Cross, NW1, to British Airways Pension Trustees for £78.75m, which has leased the property back to the retailer.
Big Lobster, a subsidiary of Ted Baker whose only asset is the company’s HQ, has sold the building to raise funds to “repay existing indebtedness to significantly de-lever the group”.
The sale represents a 39.1% increase on the book value of the property as at 26 January 2019, which was £56.6m.
Following the sale, Ted Baker has entered into a short-term lease with British Airways Pension Trustees, with the option to take a long-term lease of the adjacent building, Bowline.
Ted Baker will stay in its current HQ for an annual rent of £3.25m until Bowline is ready to move into. It has the option to sign an agreement for a lease of part of Bowline until 1 June 2021.
If Ted Baker chooses to sign the 10-year lease for Bowline, an initial 21-month rent-fee period (totalling £8m) would be granted, after which the annual rent would be £4.3m with a review at year five.
The short-term lease on the existing HQ will expire on 31 March 2023, or on three months’ notice after 1 June 2022.
The retailer also announced its additional loan facility had increased by £13.5m until 18 December 2020. This is to provide “further financial flexibility” while the company undergoes a transformation programme, details of which will be announced in May.
Rachel Osborne, acting chief executive, said: “The sale and leaseback of the Ugly Brown Building and future relocation of our head office are significant developments resulting from the broad asset review we have undertaken in recent months.”
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