Evaluation comes amid criticism that property portfolio may have been undervalued and Royal Mail sold off on the cheap
Clifford Chance, the "Magic Circle" City law firm with links to some of the leading investors in Royal Mail, has been privately analysing the newly floated company's portfolio of 2,000 UK properties.
News of the evaluation comes a week after MPs on the Department for Business, Innovation & Skills select committee probed bankers on the value of the newly privatised company's property portfolio, amid criticisms that it may have been undervalued and that Royal Mail sold off on the cheap. Vince Cable and Michael Fallon, the ministers who led the controversial flotation, are set to appear in front of the committee on Wednesday.
It is not clear which client has engaged the law firm, but Clifford Chance has previously represented organisations including the Children's Investment Fund and GIC, Singapore's sovereign wealth fund, who are two of Royal Mail's largest shareholders.
The Guardian understands that Clifford Chance has received a report containing details of around 800 properties held by the Royal Mail subsidiary Royal Mail Estates which are registered with the Land Registry in England and Wales.
The portfolio includes a string of sorting offices and plots of land – such as the Mount Pleasant and Nine Elms sites in central London which are part of three property redevelopment plans already predicted to make Royal Mail around £300m. Around 95% of the portfolio is freehold property.
As a large proportion of the portfolio consists of sorting offices, investors are unlikely to be able to dispose of them for a quick profit as the business needs the sites to operate. However, analysts have estimated that there could be around £100m of Royal Mail properties that are surplus to requirements, while the fact that the group owns so many freeholds was always likely to attract certain sections of the property industry, at a time when businesses selling their properties for cash and then leasing them back appears to be coming back into fashion.
A spokesman for Royal Mail said the company had "pursued" sale and leaseback in the past, but it was not currently "a key part of our strategy".
However, the UK supermarket group Morrisons announced in September that it would review its £9bn property portfolio with a view to doing such a deal.
The Morrisons announcement came only five years after Sir Ken Morrison, the chairman who led the company for 50 years, said that sale and leaseback was anathema to the grocer.
Aside from the 800 properties registered to Royal Mail Estates, there are further sites in Scotland and Northern Ireland, while the remainder that take the total to 2,000 are largely made up of leasehold sites that Royal Mail has occupied for less than 10 years.
Royal Mail floated last month at an initial value of £3.3bn, but the shares quickly soared prompting criticisms that the taxpayer may have been shortchanged. When the stock exchange closed on Tuesday evening, the company was worth £5.3bn.
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