UK asset manager Quadrant has teamed up with Alberta Investment Management Corporation (AIMCo) to buy a £150m development site in Nine Elms, React News can reveal.
Quadrant has brought the Canadian institutional investor onto the deal, having first agreed terms to buy the plot more than a year ago.
Royal Mail went under offer to sell the slice of its former depot in Nine Elms – known as Plot A – last July, when Quadrant secured the deal ahead of rival bids from the likes of MiddleCap, among other investors.
The transaction is Royal Mail’s latest sale on the parcel of land which once housed its sprawling depot in Nine Elms, as it continues to carve up the site for lucrative disposals to developers.
The 12-storey, 140,000 sq ft office scheme, for which Royal Mail secured planning consent, will feature a rooftop terrace and will target a BREEAM Outstanding rating. The development will have a gross development value of around £150m.
The site was previously purchased by Royal Mail in 1973 and was developed over the next 30 years as its operations centre. As part of a review of its processing operations in Greater London, Royal Mail announced in March 2011 its intention to close the Mail Centre and it ceased operation in 2012.
Royal Mail subsequently worked up a masterplan with Allies & Morrison for the development of the site – now known as Nine Elms Park – with a view to parcelling up areas for sale to developers.
It covers 14 acres, of which 8.35 acres are developable in line with the outline planning consent granted by the London Borough of Wandsworth in March 2012.
The masterplan is divided into eight plots – A, B, C1, C2, D, E, F and G – all of which at present have consent for residential uses apart from Plot C2 which has consent for a primary school.
Plots E, F and G are the only plots still owned by Royal Mail.
Nine Elms Park is centred on a linear park, which runs the length of the site east to west, alongside residential-led development and commercial space. It extends from the new US Embassy to the planned Northern Line extension.
Three of the plots have now been sold on to developers. Plot C, the third plot to be sold, went to Galliard Homes for £22.2m for development as 262 homes.
Last May, Henderson Park and Greystar Real Estate Partners completed their acquisition of Plots B and D, first agreed in 2017, for £101m. They intend to develop them into an 894-home build to rent (BTR) residential scheme to add to their PRS portfolio.
Nine Elms Park is situated in the 227-hectare Vauxhall Nine Elms Battersea Opportunity Area, the largest regeneration zone in central London aiming to deliver 20,000 new homes and 25,000 new jobs across 6.5m sq ft of commercial space. New infrastructure
The Plot A deal is expected to complete in December with construction works due to begin in 2021.
Tristram Gethin, founding partner at Quadrant, said: “Closing this deal with a new investment partner is an exceptional achievement and highlights our continued confidence in the future of the office here in London.
“This development is set to become a vibrant new community, enviably positioned between the iconic Battersea Power Station and the US Embassy. Having worked closely with Royal Mail on the plans, we’re thrilled to be bringing this exciting development a step closer to reality and hope that this is the first of many projects we will be working on together with AIMCo.”
Rupert Wingfield, head of Europe, real estate at AIMCo, added: “With the new US Embassy, the ongoing Battersea Power Station development close by and new transport infrastructure in the pipeline, Nine Elms is an exciting district within an everpopular city and we look forward to working with Quadrant on the development of this highquality scheme”.
Accord Europe advised Quadrant; Savills acted for Royal Mail.View all our news