Royal Mail Group has boosted its coffers by £120m after agreeing to sell off one of its main office buildings in Central London, as part of its efforts to trim costs.
The freehold rights on the building at 35-50 Rathbone Place, just off Oxford Street, have been acquired by property developer Great Portland Estates, although it has been leased back to Royal Mail Group until 2013.
Great Portland Estates said it will net £4.6m out of the deal, after which Royal Mail will hand over the building for redevelopment.
Royal Mail had submitted a planning application to redevelop the site itself, with just over 380,000 square feet of space to be converted into offices, residential and retail uses.
But the building purchase is completed, the new buyers intend to withdraw the proposals and submit new plans for redevelopment.
Under the deal, Royal Mail would share future profits from the redevelopment of the site, a project that is expected to benefit from the Crossrail transport link being built underneath Central London.
Great Portland Estates chief executive Toby Courtauld said: “We are delighted to have added this important West End site to our medium term development pipeline. Its redevelopment will accelerate the regeneration of the East End of Oxford Street, one of London’s most exciting submarkets, which is set to benefit significantly from the opening of Crossrail.
“We look forward to working closely with both Royal Mail Group and Westminster City Council to maximise the benefit the site can bring to this part of the Capital.”
