Part of Royal Mail’s 1,870-home South London Mail Centre scheme in Nine Elms, SW8, is being offered for sale to the private rental market.
The move follows the collapse of an attempted sale of the entire 14-acre scheme last year.
Plot D at the site, which has capacity for 365 flats, is being offered to PRS operators for close to £75m. Plans for the site include an 18-storey tower and surrounding smaller adjoining buildings, which could have an end value of up to £225m.
Amid concerns over a slowing residential sales market in central London, there has been growing interest in having a dedicated rental component to help advance schemes.
By developing some units for rent early on in a large project, such as the Royal Mail scheme, place-making is enhanced, which can lead to faster future absorption rates and higher sales values.
The South London Mail Centre scheme, which is opposite Berkeley’s Riverlight development and next to Ballymore’s Embassy Gardens, was first put up for sale in 2014 and bidding reached as high as £350m. Last year a joint venture between Ballymore, Ecoworld and Barratt came close to buying the site, but no deal was agreed.
A sale at the proposed price would have provided a substantial premium to book value for Royal Mail and a boon to shareholders who bought into the company’s controversial privatisation.
Savills is advising on the sale. All parties declined to comment.
