Oxford Properties has struck a deal with Brockton Capital to take a 50% stake in a £500m development project in the heart of London’s booming Midtown.
The Canadian investor and the private equity fund manager will form a joint venture for the redevelopment of the former Royal Mail depot site at 21-31 New Oxford Street, WC1.
The site has planning consent for a major office-led mixed-use scheme which will be called the Post Building.
The Alford Hall Monaghan Morris-designed plans comprise 250,000 sq ft of offices and 35,000 sq ft of shops, which will be let to independent retailers. It also includes 21 affordable homes in a separate block fronting High Holborn.
The joint venture – Oxford’s fourth tie-up on a major central London development – hopes to start demolition over the summer.
It aims to complete the scheme in 2018 in a bid to capitalise on the arrival of Crossrail at nearby Tottenham Court Road in the same year.
CBRE, Pilcher Hershman and JLL have been appointed to lease the office elements of the project, while CBRE and Davis Coffer Lyons will seek retail occupiers.
The deal marks a major step forward for the site, which is occupied by a 1960s office block that has been derelict for around 20 years.
Brockton bought the former sorting office – infamous as a haunt for illegal raves – in March 2013 from Aviva Investors.
A source said: “Brockton has created some value through the planning process and believes in the location too much to sell. It wants to lead the new generation of developers and capitalise on Midtown’s ability to draw in footloose occupiers.”
The deal comes as TIAA Henderson Real Estate is seeking a 50% partner on the neighbouring 1 New Oxford Street scheme.
The opportunity, being marketed through CBRE, has a guide price of a £55m. The scheme has consent for an Orms-designed refurbishment which will increase the floorspace to 108,000 sq ft.
Oxford Properties is the real estate arm of Ontario Municipal Employees Retirement System.
