Berkeley set to deliver Royal Mail's 1m sq ft Mount Pleasant scheme

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The Berkeley Group has agreed terms to buy the lion’s share of the sprawling 1m sq ft Mount Pleasant development from Royal Mail for around £200m, CoStar News can reveal.
Sources said the housebuilder had gone under offer to acquire a 6.2-acre plot of land on the Clerkenwell site, representing more than 50% of Royal Mail’s Mount Pleasant Sorting Office. The site won planning permission last year for more than 600 luxury homes designed by AHMM, Allies & Morrison, Feilden Clegg Bradley and Wilkinson Eyre.

Royal Mail confirmed in February that it had begun seeking a buyer for just over half of the Mount Pleasant development, instructing Knight Frank to handle the sale. The proposals will be delivered in 10 blocks of up to 15 storeys. The bidding process has attracted the interest of some of London’s biggest developers, including Great Portland Estates and Mitsui Fudosan.

Royal Mail is expected to retain nearly five acres of the site for processing and deliveries.

While the exact terms of the deal remain confidential, it is understood that Berkeley will pay around £100m to secure the plot and then a further c.£100m as the development progresses.

The site, which straddles two London boroughs, has been at the centre of protracted planning rows over the last few years. Among other property constraints, it sits atop Mail Rail tunnels, an underground river, and other subsoil infrastructure.

It also hosts Royal Mail core operations that cannot be disrupted and is one of the largest undeveloped open sites in central London.

Last October it emerged that local residents group, The Mount Pleasant Association had secured backing from Legal & General and U+I Group, to mount its own bid to buy the site. It has submitted a “community right to build” application for part of the site to Camden Council, to be followed by other applications for the rest of the site if its bid was successful. The group intends to provide 40 more affordable homes than the consented scheme.

In February 2014, Camden Council formally refused Royal Mail’s plans to build nearly 700 homes at its Mount Pleasant site for planning permission.

The council refused planning permission on the grounds that the scheme failed to include an acceptable amount of affordable housing.

At that time, The Royal Mail Group was proposing to build 683 homes as well as shops, offices, restaurants and public space on the Farringdon site.

At Royal Mail’s request, the then London mayor Boris Johnson took the unusual decision to call in the planning application because the mail body contended no firm commitment had been given by the boroughs of Camden and Islington to determine the applications within a reasonable timescale. The decision provoked the ire of both councils which felt that Boris should have waited for them to determine the applications before mayoral intervention.

All parties declined to comment.