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October 16, 2014

Royal Mail sells central London sorting office for £111m

Royal Mail has sold its former central London sorting office next to Paddington station to a Singaporean consortium for £111m.

The newly-privatised company sold the one-acre site, which dates back to 1907 and was recently used as the setting of the National Theatre and Punchdrunk’s production of The Drowned Man, to Great Western Developments on Tuesday for £111m, with the option of collecting a further £20m if the developer is successful in winning further planning permission.

Great Western Developments is 70%-owned by Singaporean hotel company Hotel Properties Limited and 30% by Anchorage View, another Singaporean registered firm.

Royal Mail vacated the site in 2008 and won planning permission in 2012 to convert the building into 128 flats and an eight-storey office building with shops and restaurants on the ground floor.

Under the deal, Royal Mail will receive 50% of any profits from a sale of the site within a year and 25% within two years.

Royal Mail’s group property director, Martin Gafsen, said: “Royal Mail continues to seek to optimise value from sites no longer required for operational use and will consider all options as to the manner in which this is achieved.”

Earlier this month, Royal Mail got the go-ahead to build 681 homes on part of its Mount Pleasant sorting office in Farringdon, despite criticism over a lack of affordable housing. Royal Mail has been criticised for not collecting the full value of its property assets.

It sold a 2.3-acre Post Office site on Rathbone Place, just off Oxford Street, for £120m in 2011. The site, which is being developed by Great Portland Estates into offices, shops and 162 apartments, has been valued at £550m on completion.

theguardian.com

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