Key Property Investments has sold Elephant & Castle Shopping Centre to Delancey and APG for £80 million.
Delancey will put the shopping centre site together with its adjacent Tribeca Square scheme to create a new 'South Village' of new homes for rent and retail.
'South Village' will emulate 'East Village' at the Olympic Park which has hundreds of homes available to rent direct directly from the developer.
Key Property Investments, a joint venture between St Modwen and Salhia Real Estate bought the centre in May 2002 for £29.25 million.
"For the last 11 years, we have significantly increased the value and potential of the Elephant & Castle Shopping Centre through strong asset management initiatives and we had also looked forward to redeveloping the centre to drive a wider scale regeneration of the area," said Bill Oliver, chief executive of St Modwen.
"However, both St Modwen and Salhia believe that the price offered fully reflects the potential of the scheme and provides certainty of exit, while crystallising a significant profit for our shareholders.
"We believe this is a very positive outcome which also leaves us well placed in terms of capital and human resources to focus on our other significant regeneration projects in London and the regions."
Jamie Ritblat, CEO of Delancey, said: "We are delighted to be continuing the delivery of a significant residential investment strategy in Elephant & Castle with such a high calibre partner as APG; particularly at a time, when the affordability of housing in London is an increasing concern.
"Combining an exceptionally well-connected zone 1 location with zone 3 pricing, Elephant & Castle is one of Europe's foremost regeneration projects, and represents a hugely exciting project for us to be moving forward."
Cllr Fiona Colley, Southwark's cabinet member for regeneration, said: "I welcome Delancey and APG's purchase of the shopping centre and very much look forward to working with them on our plans to provide a destination town centre.
"We have already publicly expressed our requirement for full demolition in order for this to happen and spoken about our aspirations for better pedestrian access to the stations and new market square and park.
"The council already has a good relationship with Delancey as we have a joint-working arrangement for the Tribeca Square site in Elephant and Castle so I hope we can quickly start consultation on a project with so much potential for local residents, businesses and those coming to the area."
The council's response to Delancey's intention to building hundreds of new homes on the shopping centre site remains to be seen; senior figures in the authority had been unhappy when St Modwen proposed 1,000 new homes as part of their plans.
Delancey's other London assets include the Southside shopping centre in Wandsworth. It has also been involved in the redevelopment of the infamous Tricorn Centre in Portsmouth.
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