A MAJOR shopping and office area in York city centre has been sold for £11.1 million.

Wetherby-based Oakgate Group Plc has offloaded its freehold interest in Swinegate Court East and Swinegate Court West.

The buyer was Royal London Asset Management, on behalf of Royal London Mutual Insurance Society Limited and Royal London Exempt Property Unit Trust.

The trendy part of the city, built in the early 1990s, consists of two separate but complementary areas in Swinegate, with speciality retailing and office accommodation above; specifically 16 retail shops, a bar and some 30,000 sq ft of offices.

There are about 30 tenants, including shoe shop Chinelli, English fashion shop Mulberry Design Ltd, the Slug and Lettuce, Piggy's Sandwich Shop, the Tasting Room Restaurant and Cube hairdressers.

Among the office tenants are the City of York Council's leisure services, but its lease ends next year and a decision has yet to be taken on whether it will continue in Swinegate.

Meanwhile, Royal London's acquisition will yield 6.5 per cent of the selling price - or more than £733,000 per annum.

Emma Gilchrist, chartered surveyor and fund manager for Royal London Exempt Property Unit Trust, said: "I don't think we'll make too many changes.

"We have bought Swinegate with a view to maintaining its success as a niche area yet with retail rents at a discount to those in prime retail parts of York.

"There is no immediate policy to change those rents.

Oakgate, one of the leading property development and investment companies in the north of England, bought Swinegate from the insurance group General Accident in 1995.

Over the past decade Swinegate has been transformed from a neglected cul-de-sac into a thriving retail quarter in the heart of York by active asset management.

Richard France, the managing director of Oakgate, said: "We are very proud of what we have achieved in Swinegate, but we felt it was the right time to sell.

"Swinegate has been part of the backbone of our investment operation and we will now be looking to add other significant investment opportunities to our burgeoning portfolio."

King Sturge advised Royal London while Hill Woolhouse advised Oakgate Group Plc.

Updated: 11:29 Tuesday, April 26, 2005