Liberty's store sold in £66.5m deal

LIBERTY'S flagship store on London's Regent street and an adjoining office have changed hands for £66.5m. The cash sale and leaseback of the two buildings to listed West End property developer Great Portland Estates rids Liberty of its £61.9m of debt, leaving the retailer poised for expansion of its goods overseas.

Liberty's chairman Richard Balfour Lynn said the deal 'focuses resources on developing designed luxury goods aimed at the international market'.

Liberty operates under holding company Retail Stores which in turn is 68%-owned by property developer Marylebone Warwick Balfour. Retail was paying annual interest charges of around £3.9m on its debt.

Retail Stores will book a pre-tax profit of around £3.5m over the book value of the buildings from the sale, after agents' and legal fees.

Great Portland Estates has bought the two buildings via a joint venture with Liverpool Victoria Friendly Society. The biggest building, known as Liberty Island, is on a 46-year lease from the Crown Estate and covers 63,000 square feet.

The ground floor is let to Liberty, Gap and Barclays Bank. Most of the space above is let to serviced office company MWB Business Exchange. Next door Lasenby House is a freehold site covering 25,500 square feet let to Liberty with a sublease of 17,600 square feet to MWB Business Exchange.

The two buildings generate £4.4m of rent a year.