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RMG exchanges contracts on two Nine Elms plots

05 June 2017 07:18

Royal Mail said 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 £101m in cash.

Royal Mail's site covered about 14 acres of which 8.35 acres were developable pursuant to the outline planning consent. Plots B and D comprised 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.

It intended to develop purpose-built, high specification private rental apartment buildings on the two plots.

A deposit of £3m had been paid to Royal Mail following the exchange of contracts.

The remaining £98m was 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 was expected to be granted before the end of Royal Mail's 2017-18 financial year.

The proceeds of this sale would be used for general corporate purposes, with around £30m 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 was 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 £43m and Plots B and D had a net book value of £12.9m.

Story provided by StockMarketWire.com

Related Company: RMG

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