Last checked at 15 Mar 2010 08:11
FOR IMMEDIATE RELEASE
15 March 2010
LIBERTY PLC:
SALE OF FREEHOLD OF FLAGSHIP STORE FOR
£41.5 MILLION
Further to the announcement made on 1 March 2010, Liberty Plc ("Liberty" or "the Company") which is 68% owned by MWB Group Holdings Plc ("MWB") today announces that it has exchanged contracts for the sale of the freehold interest in its 125,000 sq ft flagship store on Great Marlborough Street, London W1, for £41.5 million to Sirosa Liberty Limited. The sale price reflects an initial yield of 4.8%.
The sale follows a six month review by Liberty of a range of options and initiatives that would enable the Company to build upon its success since the launch of the Renaissance of Liberty in February 2009.
On completion of the sale, Liberty will lease back the store and continue to operate as one of London's most cutting edge, but accessible, design-led retailers from the Tudor Building. Under the terms of the proposed deal, Liberty will take an institutional 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. The funds will be used by Liberty to repay its bank and other debt and thereafter to provide additional financial resources for the Company.
The freehold of the flagship store was valued at £30.25 million at 31 December 2009, the date of Liberty's recent year end, based on an annual rental of £2.0 million and an eight year lease term. The sale price therefore represents a substantial surplus over that valuation, reflecting the increased demand for prime freehold property assets in Central London.
At the time of its trading statement in January 2010, Liberty reported overall revenue for the year to December 2009 grew by 20% and that the flagship store had generated a 16% revenue increase during the course of 2009 compared to the previous year. All lines of business increased their revenue with Liberty on-line enjoying a particularly strong Christmas.
Trading has continued to benefit from the Renaissance of the Regent Street flagship store in February 2009 which drove footfall and market share over the remainder of the year and has continued to do so in 2010.
The sale is conditional on approval by the shareholders of Liberty's 68% shareholder, MWB, which is expected to be sought during April 2010. The Board of MWB which owns 15.8% of its issued share capital of MWB has confirmed its approval of the sale, and shareholders associated with the Board owning a further 17.5% have also confirmed their approval to the sale.
Liberty was advised in the sale by Knight Frank while the purchaser was represented by Savills.
Ends.
Contact:
Richard Balfour-Lynn, Chairman, Liberty. Tel: 020 7706 2121
Baron Phillips, Baron Phillips Associates. Tel: 020 7920 3161
Nicola Marrin, Seymour Pierce Tel: 020 7107 8000