Aldi is set to develop a new supermarket on the former East Street Shopping Centre site

The Daily Echo understands that Aldi is set to develop a new supermarket on the East Street Shopping Centre site, while more than 100 student flats could also be created.

The news comes months after plans for a Morrisons supermarket collapsed after the landowner went bust and the supermarket giant pulled out.

The old East Street Shopping Centre was built in the 1970s and advertised as the future of shopping in Southampton.

However, within decades its fortunes had begun to wane and the last retailers moved out three years ago.

Plans were put forward to replace it with a 60,000 sq ft Morrisons that would have created 400 jobs, as well as a new pedestrian access from East Street, and planning permission was granted.

But in 2014 landowner the Di Stefano Property Group went bust and last year Morrisons pulled the plug on its new store amid worsening trade figures.

That left the future of the site up in the air, while businesses on East Street said the derelict site was “devastating” their trade.

Now, however, developer Kier (Southampton) Development Ltd has taken over the site and filed a planning application with the city council.

Planning consent for a supermarket already exists and it is understood that Aldi will run the new store at the site.

A planning application has also been filed for a 260 square metre commercial unit that could become a shop, restaurant, pub, cafe or takeaway.

PICTURE: The East Street site

Capital House, the tower block overlooking the site, could be refurbished and a range of four and five-storey “townhouses” thrown up to provide accommodation for 423 students in 156 flats and houses.

Kier declined to comment when approached by the Daily Echo, except to confirm that it had been appointed as the developer for the site.

The firm is behind the redevelopment of Ordnance Survey’s former headquarters in Romsey Road into housing, and Hampshire Constabulary’s new headquarters.

While Kier has declined to say how many jobs could be created in its plans, or when work could begin on the site, the Daily Echo understands several hundred new positions would be created in construction and the supermarket, if planning consent is granted later this year.

Aldi, who declined to comment, announced yesterday that the firm will create 5,000 jobs and open 80 new stores this year in major expansion plans.

City council leader Simon Letts said: “It’s good news for East Street and the city centre residents in particular.

“They have been crying out for a low cost supermarket in the area and I’m sure it will be widely welcomed by people in Golden Grove and the wider area.

“It’s important that the pedestrian link between East Street and St Mary’s will be re-established and this will also help the East Street traders.

“Aldi’s principle is that they want local staff and to offer them what I would call the real Living Wage, as opposed to the government one, so this will provide local jobs for local people.”

Southampton Itchen MP Royston Smith said: “I’m pleased that it’s happening at long last, and I’m relieved that Capital House will be refurbished and re-used.

“The more purpose-built student accommodation we have the less pressure on our family housing stock for houses of multiple occupation so I think it’s a step in the right direction and certainly welcomed.

“There are hundreds of jobs involved. I want to make sure we see local jobs for local people, particularly apprenticeships.

“We are doing well in Southampton and across the country but there is still more to do.”