Ted Baker has entered into a contract with Leysin Investments to purchase the freehold on its head office building in London for £58m, including costs of £3m.
Known as The Ugly Brown Building, the unit at Block B, Canal Reach, St Pancras Way, London, measures 78,920 sq ft and has a net annual rent of £1.2m.
Ted Baker said the deal would give it more certainty over its operating costs, as it will no longer be exposed to rising rent reviews.
The acquisition will be financed by a £60m secured term loan, which adds to its existing multi-currency revolving credit facility with the Royal Bank of Scotland and Barclays.
The brand’s founder and chief executive Ray Kelvin 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 this will help us preserve our culture and to continue to attract and retain great talent.”
The deal is expected to complete in January 2016.
Separately, British Airways Property Trustees Ltd (BAPTL) has agreed to purchase Blocks A and C, which are adjacent to The Ugly Brown Building, from Leysin.
BAPTL has granted Ted Baker a unilateral option to purchase 50% of Block A, a 25,350 sq ft building, which is currently vacant, for a total cash consideration of £5.1m at any time within the next 15 months.
The Ted Baker board said this offered an “excellent opportunity” to acquire new space for expansion as its operations continue to grow.