With advice from GM Real Estate, Royal Mail has been able to negotiate an attractive rate for the space within Broadgate buildings 1 and 2.
The six-year office rental deal will also benefit British Land and Blackstone as they have now found a blue-chip tenant for the two buildings that UBS is vacating, when the Swiss bank moves elsewhere on the Broadgate Estate to building 5.
Additionally, with RMG’s short term office lease expiring in 2019, it will present the developers with the option of refurbishing or completely redeveloping the Broadgate buildings. By compromising on lease term and taking on the second-hand space, the Royal Mail has secured prime Central London office space at a rent close to £30 / sq ft, which is at a significant discount to the prevailing rents in the Liverpool Street area.
Sally Hopkins, a spokesperson for RMG said: "Royal Mail has agreed to lease 46,000 sq ft of office space at 1-2 Broadgate EC1 to 2019.”
The announcement is timely, as the government recently confirmed its intention to sell off the Royal Mail. The state-owned postal service is consolidating its real estate within London, as part of an overall process of restructuring ahead of the imminent privatisation. Since the RMG sold its Noho office complex in Rathbone Place to GPE in 2011, there has been a need to relocate staff from the 100,000 sq ft West End depot.
With only two weeks until RMG is contractually obliged to provide full vacant possession, the deal will allow the Rathbone Place employees to be allocated the Broadgate office rental, in addition to the Royal Mail’s depot at Mount Pleasant and HQ at 100 Victoria Embankment.