Britain has agreed to sell its embassy compound in downtown Bangkok for ￡420m, marking Thailand’s biggest ever land deal and prompting reflection on the UK’s diminishing diplomatic position in the world.

Hongkong Land, a part of the Jardine Matheson group, and Central Group, the Thai family-owned real estate and retail conglomerate, have agreed to buy the plot that sits on Wireless Road in the heart of Bangkok’s thrumming central business district. The UK Foreign & Commonwealth Office announced the sale, which had been rumoured for years, on Wednesday.

Britain bought the site in 1921 in what was then a quiet suburb of Bangkok but is now a rare patch of greenery hemmed in by skyscrapers and Central World, an upscale shopping mall whose tenants include Prada, Hermes and Chanel.