LONDON-Department-store operator Liberty has sold its Regent Street department store and offices to Great Portland Street and Liverpool Victoria Friendly Society for euro 97.3 million ($126.2 million). The deal clears the retailer's debt and, according to Liberty chairman Richard Balfour Lynn, "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 Stores will book a pre-tax profit of around euro 5 million ($6.6 million) 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 sf. The ground floor is let to Liberty, Gap and Barclays Bank. Most of the space above is let to MWB Business Exchange. The adjoining Lasenby House is a freehold site covering 25,500 feet leased to Liberty with a sublease of 17,600 sf to MWB Business Exchange. The two buildings generate euro 6.4 million ($8.3 million) in rent a year.

"We announced the formation of our joint-venture relationship with Liverpool Victoria in November last year," recounts Great Portland chief executive Toby Courtauld. "These latest acquisitions will see this partnership fully invested in first-class assets with real angles for value creation."

The Liberty-Great Portland deal is the latest in a string of sale and leasebacks this year. Earlier in 2005, department-store operator Debenhams announced it was selling its 23 remaining freehold properties to British Land for euro 725 million ($ 939 million). Boots has shortlisted five bidders for its euro 439.2-million ($569-million) disposal and Tesco has retained KPMG to do a sell-off program.