Liberty freehold attracts premium
The freehold of the London landmark building housing the retailer Liberty has been sold at a substantial premium, after it was put up for sale earlier this month. The Tudor-style 125,000 sq ft building just off London’s Regent Street has been bought by Sirosa Liberty, a German private investor, for £41.5m – a sale price reflecting an initial yield of 4.8%.
MWB Group Holdings, which owns 68% of the department store group, has conducted a six-month review of its options for the business. Liberty is to lease back the store after completion of the sale and will continue to operate it. Under the terms of the deal, Liberty will take an institutional 30-year lease on the building at an initial annual rent of £2.1m, with five-yearly fixed rent reviews during this period.
The store’s freehold was valued at £30.25m as of 31 December 2009, based on an annual rental of £2m 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,” MWB Group said.
The sale requires shareholder approval, which will be sought at a meeting during April.
