Dixons unloads bulk of property: Retailer takes 3m pounds loss on 28m pounds sale to Legal & General

DIXONS Group, the electrical retailer chaired by Stanley Kalms, yesterday sold the bulk of its British property portfolio to Legal & General in a pounds 28.55m deal, writes Heather Connon.

The portfolio being acquired by Legal & General was valued in Dixon's books at pounds 31.5m and the pounds 3m loss on disposal will be included in the current year's results. It is a mixture of retail and office property, in London and the provinces, with an annual rent roll of pounds 2m. That puts the disposal on a yield of 7 per cent, although some of the properties are unlet.

The group announced in June 1992 that it intended to dispose of its British property interests and took a pounds 26m write-down against the value of the portfolio ahead of the sale. A further pounds 6m was provided in the group's accounts for the year to 1 May.

The sale leaves the group with two properties in the West End of London, valued at pounds 6.6m. Robert Shrager, corporate finance director of Dixons, said further provisions on these properties were unlikely as the current valuation put them on a yield of about 10 per cent, above yields currently being achieved on property sales.

The group also has a portfolio of European properties, valued at about pounds 110m. This will be retained. Dixons shares closed 4p higher at 237p.

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