The owners of The Mailbox are looking to sell the iconic Birmingham development as they focus their attention on new projects in the city.
Birmingham Mailbox Ltd, which is owned by Alan Chatham and Mark Billingham, has appointed CB Richard Ellis and GVA Grimley to investigate the market with a view to selling the scheme – which has a potential value of about £150 million – in the new year.
The news should bring to an end increasingly fervent speculation about The Mailbox’s future within the property community amid claims earlier in the year that the development’s banks were considering putting it into administration because its value had fallen so significantly since it was refinanced at the top of the market in 2007.
However, Mr Chatham said the timing was now right to explore the possibility of selling the scheme as he and Mr Billingham looked at other opportunities.
“There is a great deal of demand for well let, cash generative properties but very few are actually coming to market,” he said. “Those that have, have generally achieved excellent prices, as illustrated by the sale of properties at Brindleyplace earlier this year.
‘We are therefore currently considering selling The Mailbox in the new year, subject to appropriate market conditions. We have appointed CB Richard Ellis and GVA Grimley to review the market opportunities. As the UK’s largest mixed use building, The Mailbox is a significant landmark for Birmingham and has been a catalyst for further regeneration of the area. Throughout the recession tenants have generally continued to trade well, with the restaurant and bar trade actually increasing with all this space fully let.
“The sale of the scheme will allow us to diversify and focus on new projects both within Birmingham and elsewhere and we are actively working towards submitting a planning application for the Post & Mail building in the early part of next year.”
The potential sale of The Mailbox comes on the back of a tough year for Mr Chatham and Mr Billingham after Lloyds Bank put the development company behind The Cube - at which both men were the major shareholders – into administration alongside the main contractor arm of the business, Build Ability. Following the appointment of administrators PwC to the iconic Make-designed building, it was reported that Lloyds, which originally financed The Mailbox, were in talks with RBS, which had taken over half the debt, over whether to call in The Mailbox as well.
However, the fact that the building is being sold by Birmingham Mailbox Ltd suggests a deal has been done with the banks although they are unlikely to recoup all their investment in the current market.
Not that Mr Chatham is a stranger to challenges as he was one of the driving forces behind Brindleyplace when he worked for developer Rosehaugh before it went bust and the project was picked up by Argent. After that he acquired the old city centre sorting office with Mr Billingham and transformed it into The Mailbox, attracting stellar retailers like Armani and Harvey Nichols to the city for the first time and playing a huge part in changing outside perceptions of Birmingham.
Two years ago Mr Chatham acquired the former Post & Mail building on Colmore Circus for just over £5 million and despite the challenges of the last couple of years, he certainly hasn’t lost any of his appetite for development.
Last year when the deal went through Mr Chatham speculated about what could be achieved with the building - including a ground-breaking design that would have seen a public square built over-looking the city – but he admits that while he is still ambitious, any new designs would have to be more in keeping with the realities of the economic environment.
He said: “We are still committed to creating a new mixed use scheme at the old Post & Mail site in terms of it entailing some office, residential and retail, but at the moment just not defined. There is no doubt that this scheme will be more modest because what we are keen to do is deliver. We have got to keep it sensible as we don’t want to wait years before we can do anything.”
In a bid to bring some revenue into the scheme, Mr Chatham said the first aspect of the development would be a car park across the six underground floors where the old printing presses used to be housed and he believed that work could be started on this as early as next autumn.
He said: “We have had the building now for 18 months or so and we are working through some fairly technically challenging structural issues but if we get planning then I am confident that we will get something going soon.”