Development Securities has sold its property holdings in Kirkby to Tesco as it withdraws from the battle to regenerate the town centre.
In a stock exchange announcement today it said it had sold the Town Centre retail asset, which it bought in April last year for £65m, ‘at a value which equates to book value and the original cost incurred by Development Securities’.
The property company’s plans for the town centre have caused controversy as they were pitted against Tesco's £400m rival scheme which includes a new stadium for Everton Football Club. Knowsley Council has backed the Tesco scheme.
The sale marks a departure from DevSecs previously stated plans of submitting a planning application for the scheme later this year.
In its results at the beginning of the month DevSecs said it was in talks with Tesco regarding the supermarket giant’s application.
It said: ‘If we are unable to reach a mutually compatible resolution, we plan to submit our own revised master plan and planning application later this year.'
DevSecs £200m proposals comprised retail space, a civic quarter, an upgraded public realm. It has also signed an exclusivity agreement with ASDA to anchor the redevelopment.
However, it is thought that DevSecs has decided to sell to avoid a protracted battle wtih Tesco while the proceeds from the sale will reduce its net debt of £70m.
Michael Marx, chief executive of Development Securities, said: 'We regret our departure from Kirkby but this is the right decision for our business.'
Tesco's 'Destination Kirkby' plans
Tesco's corporate affairs manager Michael Kissman, said: 'This deal ensures that the whole of Kirkby town centre can be included in the exciting regeneration plans of the 'Destination Kirkby' project. Our plans have always been about adding to the town centre, rather than replacing it, and this deals proves that point.
'A key priority will now be to meet the range of tenants on this site. We want to work with local traders to ensure this site benefits from the wider investment for new shops and an Everton stadium currently being considered by Knowsley Metropolitan Borough Council.'