Columbia Threadneedle has completed the sale of a prime retail asset in the centre of Newcastle, React News can reveal.

In a deal brokered by Clifton and Prime Retail, the fund manager has sold 84-92 Grainger Street and 18-28 Bigg Market, a Grade II-listed property covering 114,000 sq ft to a party connected to TJ Hughes, the asset’s main tenant.

TJ Hughes trades from a store totalling nearly 95,000 sq ft, with two small units let to Taco Bell and a local bar operator.

The asset currently generates £810,796 a year in rent, with TJ Hughes’ lease expiring in 2027, and has been put on the market for £4.7m, representing a net initial yield of 16.2%.

In the long term, the building could offer redevelopment potential, with the site holding the possibility of hosting a hotel, offices or leisure.

Following its purchase, TJ Hughes could potentially downsize and regear its current lease to free up the building’s upper floors for redevelopment including a hotel or residential, subject to planning.

Prime Retail was instructed to find a buyer for the property in August this year.

Newcastle’s prime retail market has drummed up plenty of interest despite the wider economic slowdown, with Columbia Threadneedle’s sale the latest in the immediate area.

Last month, React News revealed the Reuben brothers’ Motcomb Estates vehicle had purchased Central Exchange Buildings from Royal London Asset Management off a guide price of £11.75m.

Central Exchange, a Grade-II listed retail asset, was originally built in 1837. It includes a variety of 22 shops and restaurants over basement, ground and first floors, with occupiers including Cote Brasserie, Size?, Greggs, Scribbler and some independents.