Legal & General has acquired a UK shopping centre in Somerset for £21m (€23.5m) in partnership with a local authority.

The UK insurer said it bought the Sovereign Shopping Centre in Weston-Super-Mare for its Limited Price Inflation (LPI) Income Property Fund in a deal with North Somerset Council.

As part of the deal, the fund will lease the asset to North Somerset Council for a term of 35 years, at which point the ownership will revert in full to the local authority.

The arrangement will provide North Somerset Council with patient, long-term investment to support the regeneration of Weston-super-Mare, in turn delivering more jobs and driving economic growth in the local area.

The Sovereign Shopping Centre extends to 119,084sqft, comprising 32 retail units, four kiosks and a food court. The ownership includes a further 10,764sqft across six retail units located on High Street. In addition, the centre includes an 876 space multi-storey car park, forming a large part of the town’s parking provision.

Pete Gladwell, the head of public sector partnerships at Legal & General, said: “Society is the sum of interrelations, and yet the financial sector has too often been a one-way street; sapping wealth into speculation that benefits only a few. Our support of North Somerset Council is a productive investment that supports the original source of society’s wealth – communities across the UK.

”By partnering with a progressive and proactive council, we can enable the regeneration of necessary retail provision for the area, deliver them sizeable revenue surpluses, and act as a catalyst for their plans for wider regeneration, boosting local jobs, homes, and driving economic growth.”

Councillor David Pasley at North Somerset Council, said: “This is a bold and innovative decision that will allow us to generate a significant annual income. In the face of diminishing government funding and cut-backs, we have to take big steps to replace the funding we depend upon to continue essential public services.”

Pasley said as the traditional high street continues to change, the council is making a major commitment of confidence in the local economy, community and business sectors.

”We will be exploring options around how a re-focused Sovereign Centre can add to the vibrancy of the town centre, encouraging local independents to take space, looking at family-focused activities and seeing whether other services could be operated from units in the centre as well as retail.”