A landmark building in Southampton city centre has been sold by the cash-strapped council for more than £12million.

Southampton City Council completed the sale of One Guildhall Square to the University of Southampton earlier this year.

Councillors signed off on disposing of the freehold for the site back in November but the buyer and income from the sale were not disclosed.

The University of Southampton posted online that it had acquired One Guildhall Square with plans now taking shape to refurbish the building.

Southampton City Council’s statement of draft accounts 2023/24 was published online in late May and it included details about the transaction.

Under the heading of ‘Asset Development and Disposal Programme’, the statement said: “Capital receipts secured from the disposal of assets will be used to fund transformation activity across the council and potentially to fund expenditure which is capitalised using a capitalisation direction.

“The first property to be disposed of under this programme was One Guildhall Square, for which the sale proceeds were £12.75m (net of VAT).”

The council is aiming to bring in £85million through sales in the asset disposal and development programme.

Civic leaders have denied it is a “mass sell-off”, instead describing it as an opportunity to manage assets “much more proactively”.

The Labour administration has said it is looking to retain, develop or regenerate much of the council’s portfolio, while selling properties and sites it did not really need any more.

Money from disposals will be used to plug the £39.3million gap in the 2024/25 budget following in-principle approval from government to use capital income to cover revenue costs.

The authority has confirmed listed buildings, schools, libraries and housing stock will not be sold.

One Guildhall Square occupies the site of the former C&A department store in Above Bar Street.

The University of Southampton was already occupying the fourth and fifth floors, and part of the third floor of the current building prior to acquiring the freehold.

Company Capita occupied the first and second floors, and part of the third floor while it was in an outsourcing agreement with the council for various activities including customer services, HR, procurement and IT services.

This agreement was terminated in July 2018. Capita remained a tenant in a smaller part of the building for an additional year before the council became the occupant of the firm’s spaces.

After the pandemic and flexible working arrangements, the local authority’s office use of the site was vacated and moved into the nearby Civic Centre.

A Southampton City Council spokesperson told the Local Democracy Reporting Service: “The sale was made in line with our legal duties to get best value for the residents of Southampton for any assets we sell."

The ground floor of the building is occupied by restaurant Turtle Bay, bar Preez and health service provider Medigold. Their tenancies have transferred from the council to the university.

Speaking about the purchase, Kevin Argent, University of Southampton’s executive director of estates and facilities, said: “We are very excited with the possibilities this purchase opens up for the university.

"Along with the Sir James Matthews building, the John Hansard Art Gallery and further afield the Mayflower halls of residence and gym, we now have a substantial footprint in the cultural quarter of the city.

“Now that we are on three sides of the Guildhall Square these buildings will be referred to as the City Centre Campus and will be developed further to support immediate estate needs and for the university’s longer term ambitions.”