The sale of the Brentford site has been on the cards for a while, with headcount much reduced at the business and consumables and parts logistics outsourced to Miniclipper last year.
The 13,000sqm property is in a valuable waterside location in Brentford, West London that is currently a hot spot for housing developments as part of a massive regeneration of the area.
When the business restructured last year, managing director Ryan Miles said it was “inevitable” the site would be sold at some point.
In its most recent accounts for the UK, to 31 March 2020, Heidelberg UK said it had entered into discussions to sell the Brentford freehold, which had been revalued at £18.1m on its books.
Sales at the UK business in the year to 31 March 2020 slipped slightly to £78.25m and it made an operating loss of just over £4m due to increased competition, “weakening margins and increased costs”.
The Covid-19 crisis then went on to impact sales further, after the year-end.
In a statement, Heidelberg’s German head office said it had agreed a purchase price "in the mid-double-digit million-euro range", so potentially around €50m (£43m) with developer Fairview New Homes, with the deal to be finalised in Q4 2021.
The prominent red brick Brentford building is a local landmark, and was a custom design and build project for Heidelberg that was officially opened in 1983 by Lord Chalfont.
UK managing director Ryan Miles said leaving the site would be “the end of an era”, but would also mark a new chapter for the business.
“A lot has changed in the 40-plus years since we’ve been there. At the time it was a very industrial area and very easy for travel. Since then a lot of our London customers have relocated.”
He said the firm had shortlisted some potential new sites heading west from Brentford towards Heathrow Airport. The move will involve around 60 of the firm’s 160 employees.
“It’s very, very important that we look after our office-based staff, and being slightly further west helps people who travel in. Staff are very excited about going into a new modern space,” Miles explained,
“It makes sense operationally and will be far more efficient – our current building is not the most efficient from a green point-of-view.”
Miles said the new site would be in a size range of 1,400-1,860sqm, with space for a showroom of 250-500sqm.
“The showroom will stay with us when we move. It will be a different look showroom and user experience highlighting all the USPs we have, and we intend to bring a very good customer experience to our new location. The planned relocation date is December so we have time to focus on our new site,” he explained.
The UK and Ireland is one of Heidelberg’s top ten markets, with around 1,400 customers.
The proceeds of the sale will help improve liquidity at the group, which had been expecting to make €120m (£106m) from the sale of label wing Gallus to Benpac Holding, before the deal spectacularly fell through earlier this year.
Heidelberg CEO Rainer Hundsdörfer said the Brentford disposal was “an important step in the ongoing adjustment of our structures”.
“By using space more efficiently, we will save considerable costs at Heidelberg in the future. We will use the funds thus freed up to strengthen our liquidity and continue to drive forward strategic investments for the future on the path of our digital transformation."
The manufacturer has completed a string of asset sales over the past year including its flagship Print Media Academy building in the heart of Heidelberg town, part of its Wiesloch manufacturing site, and several business units including CERM narrow web MIS and its Belgian chemicals businesses BluePrint Products and Hi-Tech Chemicals.
Separately, Heidelberg is gearing up for a livestreamed online event, ‘Showtime’ next week on 23 June with partners Masterwork Machinery and Polar, where it promises a “big reveal” and an “hour full of innovations and highlights”, as well as the opportunity to arrange personal online one-to-one meetings with its experts.
Heidelberg said the event would feature product innovations in commercial, packaging, label printing and post-press.