Exchange of contract for sale of 2 Nine Elms Plots

RNS Number : 0837H

Royal Mail PLC

02 June 2017

 

2 June 2017
FOR IMMEDIATE RELEASE IN ACCORDANCE WITH LISTING RULE 1.3.4R

Royal Mail plc

Exchange of contracts for sale of two plots on the Nine Elms site

Royal Mail plc (RMG.L) announces that conditional contracts have been exchanged for the sale of two of the seven plots (Plots B and D) on its Nine Elms site to Greystar for £101 million in cash. Royal Mail's site covers approximately 14 acres of which 8.35 acres are developable pursuant to the outline planning consent. Plots B and D comprise of 2.67 acres.

Greystar is a US entity that provides multifamily and student accommodation, providing vertically-integrated real estate services across property management, investment management and development and construction services. Greystar intends to develop purpose-built, high specification private rental apartment buildings on the two plots. 

A deposit of £3 million has been paid to Royal Mail following the exchange of contracts. The remaining £98 million is conditional upon Greystar receiving planning consent from the local authority for its detailed designs for the two plots. Subject to the London Borough of Wandsworth's planning process and timescales, such consent is expected to be granted before the end of Royal Mail's 2017-18 financial year.

The proceeds of this sale will be used for general corporate purposes, with around £30 million committed to be re-invested into the Nine Elms site for infrastructure works to serve plots B and D and to support future plot developments. This is expected to benefit future sales values.  As at 26 March 2017, Royal Mail had achieved cumulative net cash inflow from its London Development Portfolio of £43 million and Plots B and D had a net book value of £12.9 million.

Martin Gafsen, Group Director of Property and Facilities Solutions, Royal Mail said: "We believe that Greystar's strategy of developing private rental accommodation will help the ongoing transformation of Nine Elms and will benefit the other plots on the Royal Mail site. The opening of the US Embassy and the new Northern Line Extension - along with the delivery of this first phase of development and the associated park on the Royal Mail site - will see the emergence of a residential community in this exciting new area of the capital."              

This announcement contains inside information.

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For more information contact:

Media

Julie Pirone

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Sally Hopkins

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Investor Relations

Catherine Nash

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Company Secretariat

Kulbinder Dosanjh

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About Royal Mail plc

Royal Mail plc is the parent company of Royal Mail Group Limited, the leading provider of postal and delivery services in the UK and the UK's designated universal postal service provider. UK Parcels, International and Letters ("UKPIL") comprises the company's UK and international parcels and letters delivery businesses operating under the "Royal Mail" and "Parcelforce Worldwide" brands. Through the Royal Mail Core Network, the company delivers a one-price-goes-anywhere service on a range of parcels and letters products. Royal Mail has the capability to deliver to more than 29 million addresses in the UK, six days a week (excluding UK public holidays). Parcelforce Worldwide operates a separate UK network which collects and delivers express parcels. Royal Mail also owns General Logistics Systems (GLS) which operates one of the largest ground-based, deferred parcel delivery networks in Europe.

 

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