Land Securities Group PLC announces that its property partnership business Land Securities Trillium ('LST') has completed the acquisition of a portfolio of 285 properties from the Royal Mail, for around €96 million (£70 million).
Of the portfolio, a total of 108 leasehold properties are vacant and surplus to Royal Mail's operations, the responsibility for which will now pass to Land Securities Trillium. These vacant properties will be refurbished by LST with a view to securing new occupiers. The remaining 177 freehold properties, where only part of the space is being used by Royal Mail for operational purposes, will be leased back by LST to Royal Mail for 15 years. Royal Mail will occupy just the space it needs within these buildings. It is expected that the contract will become earnings enhancing for LST from the second year of ownership onwards.
Commenting on the announcement, Ian Elllis, Chief Executive, Land Securities Trillium, said: "We are delighted to be entering into this partnership with the Royal Mail, which we hope will be the start of a long and mutually beneficial relationship. We have released capital for Royal Mail while providing them with a flexible operational structure and relieving them of the burden of surplus space."
Martin Gafsen, Royal Mail's Property Director, added: "We are delighted to have reached agreement with Land Securities Trillium to take ownership of the premises and space that Royal Mail no longer needs for its operation. This is a key element in our drive to increase efficiency and compete effectively in the UK postal market, which is now open to full competition. There will be no impact on the high level of service that Royal Mail is delivering to customers." He continued: "As part of the transfer, we will lease back only the space we need. This deal represents just 3% of our total operating space, so we will continue to own the vast bulk of the sites we use in our day-to-day operations."
Source: Land Securities