Ted Baker, the global lifestyle brand, has agreed to purchase freehold property which it occupies as its headquarters in London’s St Pancras Way, known as The Ugly Brown Building, for £55.25m, net of costs.
The acquisition, which includes £3m in transaction costs, will be through Big Lobster Limited, a wholly owned subsidiary of Ted Baker. The vendor was Leysin Investments Limited.
Ted Baker is financing the acquisition by a £60m secured term loan to the company’s existing multi-currency revolving credit facility with the Royal Bank of Scotland and Barclays. The facilities contain appropriate financial covenants that will be tested on a quarterly basis.
The Ugly Brown Building, at Block B, Canal Reach, St Pancras Way, is a 78,920 sq ft building with an annual rent of £1,173,500.
Ted Baker’s purchase of its corporate headquarters provides the fashion retailer with certainty over its operating costs and removes the company’s exposure to rising rent reviews.
Separately, British Airways Property Trustees Limited (“BAPTL”) has agreed to purchase Blocks A and C, Canal Reach, St Pancras Way, London, which are adjacent to The Ugly Brown Building, from Leysin Investments Limited.
Ted Baker has entered into an agreement with BAPTL which grants Ted Baker a unilateral option to purchase 50% of Block A, a 25,347 sq ft building which is currently vacant, for a total cash consideration of £5.1m at any time within 15 months from the date of the agreement.
In a statement, Ted Baker said: “The Board believes that the acquisition and option are highly attractive to Ted Baker as they offer an excellent opportunity to take ownership of its existing head office and potentially acquire new additional space for expansion as the company’s operations continue to grow.”
Ray Kelvin CBE, Founder and Chief Executive, said: “The Ugly Brown Building has become an iconic building in a rapidly developing central London location and a very important ingredient of Ted Baker’s history and unique personality.
“We are delighted to have secured our future in this excellent location as Ted Baker continues to develop as a global lifestyle brand. We are confident that this will help us preserve our culture and to continue to attract and retain great talent. This is great news for our business, our brand, and our people.”