Royal Mail plc has exchanged contracts for the sale of its former Paddington Royal Mail facility at which mail is sorted and sent to a delivery office mail centre site at London Street to Great Western Developments Limited for £111 million in cash, payable to Royal Mail Group Limited.
The one-acre site is adjacent to the Paddington main line railway station in central West London. It is part of Royal Mail’s ‘London Development Portfolio’, which comprises surplus1 sites Royal Mail has identified for potential sale or redevelopment in London. Royal Mail vacated the Paddington site in 2008 and operations relocated to Mount Pleasant.
Great Western Developments Limited is owned by Hotel Properties Limited, a listed Singaporean hotels and real estate company, which has a 70 per cent ultimate shareholding, and Anchorage View Pte Limited, which has a 30 per cent shareholding, both via a joint venture holding company.
In November 2012 Westminster City Council resolved to grant planning permission2 for Royal Mail’s mixed use scheme on the site. The purchaser intends to seek further planning permission which, if granted, will require the purchaser to pay a further £20 million to Royal Mail Group Limited. In addition, if the purchaser sells the site within two years of completion, it has agreed to pay Royal Mail Group Limited 50 per cent of any net sale proceeds above the £111 million purchase price if sold within the first year and 25 per cent if sold within the second year.
A 10% non-refundable deposit of £11.1 million is payable upon exchange of contracts. The remaining proceeds will be payable upon completion, which is expected to take place on 8 December 2014. Net cash proceeds of the sale of around £108 million will be used for general corporate purposes. The site had a net book value at 30 March 2014 of £1.6 million. The net book value reflects the purchase of the land over a number of years, beginning in 1889, subsequent building and development and Royal Mail’s policy of depreciating freehold properties over a period of up to 50 years. In addition, around £30 million has been invested in buying, building and fitting out the site over the years.
Martin Gafsen, Group Property Director, Royal Mail 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.”
- See more at: http://www.royalmailgroup.com