Hammerson is investing £335m (€441m) in a UK shopping mall.

The UK real estate investment trust (REIT) said it has exchanged contracts with Birmingham City Council to buy the Grand Central shopping centre in the UK’s second largest city.

David Atkins, Hammerson chief executive, said: ”We are strong supporters of the future of Birmingham and this acquisition provides us with additional exposure to the city’s fast growing economy.

“The acquisition of Grand Central, a highly-prized trophy asset in the UK’s second city, is fully aligned with Hammerson’s strategy of owning top-performing retail destinations in prime locations.”

In addition, Hammerson is in advanced discussions with an existing joint venture partner on other assets about entering into a 50:50 joint venture for the future ownership of Grand Central.

The 435,000 sqft centre, which opened in September last year, includes a 250,000 sqft John Lewis department store. Hammerson has bought the 150-year lease from freeholder Network Rail in the scheme, which is part of Birmingham’s £750m New Street station regeneration project.

The centre’s retail space is close to being fully let, with 96% occupancy, Hammerson said. Annual net rental income is £13.9m.

Hammerson is already present in Birmingham, having invested in the Bullring in 2003. The firm said it is also buying Ladywood House, a 95,000 sqft vacant office building next to Grand Central worth £10m.