Birmingham City Council has exchanged contracts to buy the Pallasades shopping centre in Birmingham from Warner Estate Holdings for £91m.

The council is buying the centre through the compulsory purchase order process to progress its plans for the £600m regeneration of Birmingham New Street Station – the ‘Gateway Scheme’ – with Network Rail and Advantage West Midlands.

The 1960s-shopping centre, next to the station, is a key site in the redevelopment plans.

The shopping centre was held in Warner’s Agora Max fund, a 50:50 joint venture with Bank of Scotland Corporate. The proceeds will be used to pay down debt in the fund.

Completion of the deal is expected tomorrow.