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A Shopping Mall Near Edinburgh Sold for Less Than a London Flat

A shopping mall near Edinburgh was sold at auction for just 310,000 pounds ($403,000), underscoring the perilous state of a retail industry that’s being devoured by online commerce.

That’s a quarter less than the cost of the average London apartment. The price is also barely double what the shopping center currently generates in rent, meaning a yield of nearly 50 percent for the buyer. A fund managed by Columbia Threadneedle Investments had put the Postings Shopping Centre in Kirkcaldy, Scotland, on the block with a guide price of one pound.

The value of retail outlets in the U.K. has been hammered by the rise of online retailers such as Inc. that now account for about one in five pounds spent by shoppers in the country. Tax hikes on brick-and-mortar stores, increases to the minimum wage and the rising cost of imports since the 2016 Brexit referendum have also hurt.

Older shopping centers that have been hit by competition from larger rivals are increasingly being offered for sale to developers interested in converting them into homes, distribution facilities and other uses. Just 13 of the Postings mall’s 21 stores are currently occupied, generating rent of 152,005 pounds a year on leases that are due to expire in the next two years, according to auction house Allsop, which handled the sale.

The cut-price auction lured about 100 parties interested in the shopping center, according to George Walker, a partner at Allsop. The buyer was an investor from the north of England bidding by telephone who asked not to be identified.

A spokesperson for Columbia Threadneedle said the firm is “pleased that The Postings has moved on to a new owner.” The shopping center was built in the 1980s for 4.2 million pounds, the Financial Times reported last month.