17th Dec 2015 07:53
LONDON (Alliance News) - Ted Baker PLC on Thursday said it has entered into a contract to purchase the building that houses the company in London for GBP58.3 million and said it is eyeing expansion after striking a deal to potentially acquire a stake in the adjacent building.
Ted Baker is headquartered in the "Ugly Brown Building" on Canal Reach, St Pancras Way, London, and the FTSE 250-listed company is purchasing the property through its wholly owned subsidiary Big Lobster Ltd.
Currently, Ted Baker pays GBP1.2 million in annual rent for its headquarters.
Of that total cost, GBP55.3 million will be paid for the deal, including stamp duty, with the other GBP3.0 million being paid in costs to complete the deal. Ted Baker plans to fund the purchase using a new GBP60.0 million secured term loan from Royal Bank of Scotland and Barclays, which will be in addition to the company's existing revolving credit facility.
However, Ted Baker is also looking at its expansion opportunities, after striking a deal by which it has acquired the option to purchase a 50% stake in the building adjacent to the Ugly Brown Building within the next 15 months.
British Airways Property Trustees Ltd has agreed to purchase Blocks A and C on Canal Reach from Leyshon Investments Ltd, and given Ted Baker an option to buy 50% of Block A for GBP5.1 million.
The 78,920 square foot Ugly Brown Building is otherwise known as Block B, with Block A being 25,347 square feet in size.
"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," said the company.
By Joshua Warner; [email protected]; @JoshAlliance
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