Galliard has bought a site at the former Royal Mail sorting office in Vauxhall for £25m.
The developer has taken plot C of the former South London Mail Centre, now known as Nine Elms Parkside, which has planning for 262 flats.
The site will be built out for private sale and is expected to be valued at £130m on completion.
The 14-acre sorting office site, which has planning for 1,950 homes, was valued at £662m in 2014 at the peak of the London residential boom.
However, Royal Mail