Royal Mail set to deliver up plum Croydon site

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The Royal Mail is in talks to find a new home for its delivery office in South London’s Croydon in a move that would unlock a prime development site fronting east Croydon Station, CoStar News can reveal.

The under pressure state-owned postal service has been undertaking a major consolidation of its 40m sq ft UK estate in recent years.

It is now considering options for leaving 1 Addiscombe Road for an as yet undecided alternative site in the Croydon Metropolitan Area in a move that would enable it to market a lucrative development opportunity.

Advised by Drivers Jonas Deloitte it has been in negotiations with Croydon council over the potential for redevelopment as well as alternative locations.

Its current one-acre delivery service site abuts Croydon town centre’s eastern transport hub.

It is understood that the council favours an office development but is building flexibility into its Core Strategy and East Croydon Masterplan to enable a number of uses including housing or a hotel.

The site sits close to two currently empty gateway sites where there are already significant consents for offices and residential – Stanhope and Schroders’ Ruskin Square scheme, which has consent for 1m sq ft of offices and 550 new homes, and Menta’s plans for a 750,000 sq ft development opposite the Ruskin Square scheme on Cherry Orchard Road comprising a 54-storey residential tower, including 499 homes, a 165-bed, four-star hotel, shops, community facilities and 71,000 sq ft of of start-up office accommodation.

Opposite Ruskin Square Abstract (Croydon) Limited – a wholly owned subsidiary of Mark Glatman's Abstract Securities – is understood to be enjoying strong interest in Renaissance, a 100,000 sq ft office scheme it is building speculatively at 9-16 Dingwall Road.

The Royal Mail has been pursuing major consolidation of its operations across the UK as it has faced up to large falls in the number of people sending post.

It has sought to maximise values from its surplus estate, selling off sites that have included major development opportunities in Nine Elms, Rathbone Place and Twickenham in London, as well as Reading in Berkshire, among others.

In March of last year the Royal Mail announced plans to close around half of its 64 distribution centres by 2016.

Mail centres in Croydon, Greenford, Jubilee (Feltham), Romford and Mount Pleasant were set to continue to operate. Phased closures of the east London and south London centres began immediately with only five centres remaining open in Greater London.

A spokeswoman for Royal Mail said: “We are currently reviewing our delivery facilities in Croydon driven by our need to modernise our business and improve the workplace for our people. We have no fixed plans for our Addiscombe Road site at present.”

pnorman@costar.co.uk