Capital & Regional has today confirmed the completion of the sale of its O2 Centre, Finchley Road to Matterhorn Capital for £92.5m.

As revealed by Property Week last month retail entrepreneur Sir Philip Green's stepson Brett Palos has teamed up with Anthony Lyons and Simon Conway's Matterhorn Capital to buy the scheme.

The purchase is the first for the trio's new fund.

Capital & Regional, the co-investing property asset manager which holds a 19.4% stake in X Leisure, will use the proceeds of the sale to repay fund debt.

The sale is part of the broader strategy to strengthen the financial base of the X Leisure Fund.

The fund is in discussions with investors about a capital increase and is seeking to amend the terms of its banking arrangements to create additional financial flexibility.

It said the steps are intended to leave the fund well placed to benefit from recovery in the leisure property market.

The fund has separately agreed with its syndicate of lending banks a waiver for the loan to value covenant until the end of May 2009 to allow for its planned strategy.

Debt for Matterhorn's purchase of the O2 came from Abbey and Deutsche Post at a loan-to-value ratio of 60%.

Jones Lang LaSalle acted for X-Leisure; David Baroukh Associates advised Matterhorn.