Developer Alan Chatham picked up his latest building for nearly a third its value two years before, after the property crash slashed prices in Birmingham city centre.
The former Post & Mail Building on Weaman Street is set to become the latest mixed-use project from Birmingham Development Company, the team behind the Mailbox and the Cube.
And it has emerged BDC paid just over £5 million for the city-centre site, significantly less than the £14.3m deal arranged for the building just two years earlier.
The figure was revealed in the recent six-month accounts of Trinity Mirror, the owner of the site and the parent company of the group that includes the Birmingham Post and its sister titles.
The 500,000 sq ft building has been empty since October last year when Trinity Mirror’s Midland titles moved to their current home at Fort Dunlop.
BDC said they would be turning the site into another mixed use development along the lines of their current success, but details have been scarce so far. The move was hailed by council leader Mike Whitby after being announced two weeks ago.
The Post & Mail Building was bought by BDC after going on the market again when a deal with a previous buyer collapsed.
Abstract Land – which had bought the other half of the former Post and Mail site and turned it into the 14-storey Colmore Plaza tower that stands there now – arranged a £14.3 million deal with Trinity Mirror to buy the building in 2007, but the sale fell through.
London-based Abstract still had to pay the £1.4 million deposit to Trinity Mirror despite the sale falling through.The property market in the city centre has been hit hard by the recession, with many developers struggling to find takers for the space in the new buildings being put up around the area.
BDC made its name with the development of the Mailbox, turning a former sorting office into one of the city’s most recognisable landmarks. They are currently in the process of completing the £100 million Cube development, which is the second part of the Mailbox plans. The Cube is being built out by BDC’s main contractor arm Buildability.
After making the Weaman Street purchase they described it as an opportunity to buy at the bottom of the property cycle, saying the building was “a monster of a place” that had huge opportunities for development. The six-month accounts published by Trinity Mirror showed the firm had made a pre-tax profit of £31.1 million for the first half of the year, compared to £70.8 million the previous year. Revenue was down to £383 million from £460 million. But share prices rose sharply after the firm said the decline in advertising income had started to turn.