MIPIM: Birmingham city council is to sell the Grand Central shopping centre which forms the retail and leisure heart of the £700m redevelopment of New Street station.
The council will formally announce the decision this afternoon MIPIM in Cannes. Approval for the sale will be sought at a cabinet meeting next week.
The 500,000 sq ft centre is nearing completion and is due to start trading in September alongside the 250,000 sq ft John Lewis store, which also forms part of the scheme. Both are currently under construction.
Grand Central is currently 90% prelet, with tenants including: the White Company, Cath Kidston, L’Occitane, and Kiehl’s on the retail side and restaurants such as Tapas Revolution, Caffé Concerto, Pho and Tortilla. All of the restaurants mark their debut in Birmingham at the scheme.
No agents have yet been appointed and sources say there is no guide price as yet. However, market observers put the value of the scheme at circa £250m.
The sale will help the cash-strapped council raise much-needed funds in the face of severe budget cuts and a £1bn equal opportunities legal bill.
A sale was unofficially first mooted over a year ago and both Network Rail and Hammerson were said to both be interested in acquiring the scheme.
A source said: “It makes sense for these two parties to be interested and for the sale. Network Rail is likely to want to bring the centre under its control in line with the rest of the station and Hammerson owns the Bullring so it’s a natural fit. The council is selling the family silver.”
Grand Central is the redevelopment of the former 1960s built The Pallasades shopping centre.
Speaking on the Greater Birmingham stand this afternoon, council Leader Sir Albert Bore said: “The Grand Central development has made excellent progress and I am delighted that it is on course to open to shoppers in September, along with the redeveloped New Street Station.
“It was always our intention to sell Grand Central once completed, so the time has now come for us to set the ball rolling to find the right buyer for this premium shopping destination, which will be a great asset for whoever acquires it.”
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