British Airways Pension Trustees, the retirement fund for the UK airline, has acquired the London headquarters office of fashion retailer Ted Baker for £78.75 mln (€85 mln).
The asset was sold by Ted Baker subsidiary Big Lobster, whose sole asset was the Kings Cross property in London's NW1, which forms part of a complex known as the Ugly Brown Building.
Built in the 1980s, the entire property was split into three units in 2000, with British Airways Pension Trustees owning two parts and Ted Baker the third. The deal brings the entire property under the pension fund's control, ahead of the site's planned redevelopment.
Planning permission has already been secured for a 12-storey mixed-use scheme on the plot which will include over 50,000 m2 of offices, 73 apartments, an 87-bedroom hotel, 6,100 m2 of retail space and 6,000 m2 of storage.
The sale represents a nearly 40% premium on property's book value in January, recorded as £56.6 mln.
The high street retailer's sale-and-leaseback deal initially comprises a short-term lease deal. However, it is understood that once the deal completes in June, Ted Baker will exit the property and move to temporary offices, with a view to eventually returning to lease part of the redeveloped scheme.