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Sports Direct confirms £120m sale of HQ to Malaysian fund

Edmund Heaphy
Finance and news reporter
A Sports Direct store at Oxford Street in London. Photo: AP Photo/Frank Augstein

Sportswear retailer Sports Direct (SPD.L) confirmed on Tuesday it had sold its UK headquarters in Shirebrook to a top Malaysian pension fund for £120m.

The company, which is owned by billionaire Mike Ashley, said it would take a 15-year lease as part of the sale and leaseback deal. It will use the proceeds to bolster the cash it has available for day-to-day running costs.

The company announced earlier this month that it was in advanced negotiations to sell the Shirebrook base, which includes a warehouse complex and logistics centre, to KWAA Logix Sportivo, a company owned by Malaysia’s state-run Employees' Provident Fund.

The fund has previously purchased industrial and retail properties in the UK, and is one of the owners of the Battersea power station development in London.

The Shirebrook location has been in the headlines before. Ashley was dragged before parliament in June 2016 to answer MPs’ questions about employment practices at the facility.

In particular, the Sports Direct logistics centre was criticised for zero-hour contracts, low pay, and draconian policies.

One MP said that it appeared to be a business “whose working practices are closer to that of a Victorian workhouse than that of a modern, reputable high street retailer.”

Almost entirely related to its purchase of struggling high street chain House of Fraser, Sports Direct has faced difficult trading conditions in the past year, with its share price falling 30%.

The news of the sale of the headquarters comes just hours after it emerged that Ashley was in talks to sell off Newcastle United to a group owned by an Abu Dhabi billionaire.

The Bin Zayed Group confirmed that negotiations were ongoing with Ashley, who bought the club in 2007 and put it up for sale around two years ago.

"We can confirm that representatives of Sheikh Khaled are in discussions with Mike Ashley and his team about the proposed acquisition of Newcastle United,” it said.

“We view it as an honour to have the opportunity to build on the strong support, history and tradition of the club. We have agreed terms and are working hard to complete the transaction at the earliest opportunity.”