Scottish Amicable announced the acquisition of Thames Exchange for pounds 67m and said it was teaming up with Godfrey Bradman, former chairman of Rosehaugh, to develop a pounds 150m shopping, housing and leisure development in west London.
The White City development, on the site of the 1908 Olympic Games stadium, represents Mr Bradman's first large project since the collapse into receivership a year ago of Rosehaugh, developer of the Broadgate Centre in the City.
Building on the 35-acre site between the M40 motorway and the BBC's White City studios is expected to start next year and the centre is due to open in 1997.
The development will include a 620,000 sq ft shopping centre, 66 units of social housing, a nature conservation area and a revamped Vanderbilt Racquet Club, the upmarket sports club that occupies part of the site.
Mr Bradman, who resigned from Rosehaugh a year before its collapse, is also involved in schemes to develop a 250-acre residential and commercial site near Berlin and 250 luxury flats in Hampstead.
David Hunter, of Scottish Amicable, which is expected to provide most of the project's funding, said: 'Our proposals will create one of the finest retail developments in the country and provide 2,500 permanent jobs.'
He said the acquisition of Thames Exchange from Kumagai Gumi, the Japanese construction company, was a good deal because, in the face of a fast rising property market, it had secured one of the less over-rented buildings in the City.
Although the yield of 7.23 per cent is in line with prices paid in recent City deals, the rent on the building, currently occupied by Midland Bank, is thought to be under pounds 30 per square foot.
Unlike many recent property acquisitions, its income is therefore likely to rise as rents recover.
The rush of investment interest in commercial property was confirmed yesterday by Richard Ellis, the property agent, which said UK institutions had invested more than pounds 1bn in each of the last two quarters - the highest level of net purchase since the end of 1990.
Angus McIntosh, head of research, said total year-on-year returns from property had risen during November from 10.8 to 15.6 per cent. He forecast a 20 per cent total return by the first quarter of next year.
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