St Modwen, which owns the site through its KPI joint venture with Salhia Real Estate, said today it had sold the complex for £80m.

The joint venture was under mounting pressure from Southwark Council to get the redevelopment plans moving and faced a possible compulsory purchase order from the council.

Dalancey, alongside its joint venture partner APG, will now look at plans to rebuild the dilapidated shopping complex, which forms the heart of the £1.5bn redevelopment scheme being driven by Lend Lease.

In a similar move, Delancey rescued the stalled residential scheme, now known as Tribeca Square, between the Heygate Estate and the shopping centre, when it bought the site back in 2011.

The developer started work on the Tribeca residential scheme last month. This project (pictured below) includes towers of 24, 18 and 16 storeys and will include 262 homes, a 272-bed student residence, a large Sainsbury’s supermarket and a four-screen cinema.

Jamie Ritblat, CEO of Delancey, said: “We are delighted to be continuing the delivery of a significant residential investment strategy in Elephant and Castle with such a high calibre partner as APG; particularly at a time, when the affordability of housing in London is an increasing concern.

“Combining an exceptionally well-connected Zone 1 location with Zone 3 pricing, Elephant & Castle is one of Europe’s foremost regeneration projects, and represents a hugely exciting project for us to be moving forward.”

Bill Oliver, Chief Executive, St. Modwen, said: “For the last 11 years, we have significantly increased the value and potential of the Elephant & Castle Shopping Centre through strong asset management initiatives and we had also looked forward to redeveloping the Centre to drive a wider scale regeneration of the area.

“However, both St. Modwen and Salhia believe that the price offered fully reflects the potential of the scheme and provides certainty of exit, while crystallising a significant profit for our shareholders.