Schroder Real Estate Investment Trust has exchanged contracts to acquire the Arndale Centre in Headingley, Leeds.
The 125,834 sq ft shopping centre has 23 tenants, including Sainsbury’s, Wilkinsons and Pizza Express.
Morrisons is the latest tenant to move into the scheme after recently signing an agreement to let three empty units for one of its M local stores.
Schroder which is paying for the acquisition by issuing shares representing 10 per cent of its existing share capital to raise £17.2m, plans to invest in the Arndale Centre and said it sees the development as a key site to benefit from the proposed trolleybus scheme.
Duncan Owen, head of property at Schroder Property Investment Management, said: “This acquisition is consistent with our strategy of focussing on assets offering good underlying fundamentals which are capable of adding value through a variety of alternative uses because of a strong and convenient location.
“This property already offers high quality retail units which are delivering an attractive initial income yield which is immediately accretive to dividend cover.
“There is also the potential to generate further income and capital growth from asset management of the upper parts of the property.”
Leeds-based chartered surveyors Peter Lund and Partners acted for Schroder in the deal. Mr Lund said: “The Arndale Centre has been bought at the right time. Headingley is going to improve dramatically in the next few years, particularly with the proposed trolleybus scheme.”
KPMG acted as fixed charge receiver for the building and appointed Savills to sell it in October 2013.
The Arndale Centre was built in 1964 and refurbished in the mid-1990s.
Offices were also added in 2009 to accommodate the expansion of the office tenant at the time, White Young Green.
The £2.5m investment included re-cladding the centre’s façade and a new canopy, as well as reconfiguring and expanding the centre’s stores and improving paving, car parking and lighting.
Arndale Centres were the first American-style malls to be built in the UK. The first opened in Jarrow, Tyne and Wear, in 1961.
The sale follows a number of recent investment deals in the Yorkshire region.
On Thursday it was announced that White Rose Way in Doncaster had been sold to an overseas investor for £20m.
The site is let to home improvement and garden retailer B&Q for approximately another 10 years.
Meanwhile, 54-56 Fargate – a retail and office building let to O2 – in Sheffield was sold for £1.6m to Fargate Properties, a subsidiary of Pervaiz Naviede Family Trust by M & G Real Estate.
In October, a retail development let to Superdry, Karen Millen, Sports Direct and French Connection, in the heart of York was sold for £20.6m.
No. 1-5 Davygate and 3 Little Stonegate, was sold by LaSalle Investment Management to DTZ Investment Management.
Mr Lund said: “The investment market picked up before Christmas and now we are starting to see those deals coming through.”