McLaren to Sell Woking Headquarters for £200 Million

McLaren has announced they will be looking to sell their Woking Headquarters for £200 million to raise cash and reduce debt with the intent to leaseback the facility.

It appears McLaren has gotten the go-ahead to sell the headquarters of the British supercar and racing company. However, the caveat is that the new owner is contractually obligated to lease it back to McLaren.

Consisting of McLaren Technology Centre, the McLaren Production Center, and the McLaren Thought Leadership Center, the sale through Canadian real estate Colliers, is expected to see Mclaren receive £200 million (approx. USD$256 million) for the deal. This move will allow the company to reduce its overall debt and free up cash to see the organization through the pandemic induced hardships caused by plunging sales.

This news follows from an earlier £300 million equity raised by existing shareholders after a failed request for £150 million from the UK government and a further £150 million financing facility from the National Bank of Bahrain in June.

Speaking on a Zoom call to reporters, McLaren Racing CEO Zack Brown shared the reasoning behind the sale decision.

“Why have all this money tied up in real estate? We’re not a real estate company, we’re a racing team and an automotive company,” he said.

“We’ve got a lot of cash tied up in that building and that’s not a very productive use of funds when you’re looking to invest in your business.”

“We have a good chunk of debt and now Paul (executive chairman) is starting to set a direction and take decisions to give us a stronger balance sheet, invest in the right areas, to ultimately grow our companies and be financially a much stronger company,” stated Brown.

“When COVID hit and that turned off our Formula One business, our automotive business and to a certain extent our technology business, that consumed an immediate amount of cash that we needed to call.”

“We’ve now done that and we’ve got plenty of runway to be able to make sound business decisions,” explained Brown.

There’s no doubt the British automaker has been working hard to sure up its balance sheet as it navigates the ongoing effects of the COVID-19 pandemic across all areas of the business ranging from the Formula 1 team racing team, applied technologies, and the automotive division, which has suffered with the closures of dealerships this year.

The McLaren headquarters’ sale will be a significant piece to the puzzle in keeping the McLaren Group alive to race another day and will most likely have no significant impact on the day-to-day operations of the business.