Both partners will then invest £170 million ($240 million) in return for a 50% stake. Capital & Regional will act as property and asset manager with Morley acting as fund manager. The two already have a similar arrangement, formed late last year, to handle what they intend to become a £1.2 billion ($1.7 billion) portfolio of retail parks, which will all be operated under The Junction brand.

Ian Womack, Head of Property at Morley, said: 'We believe that the powerful combination of C&R's proven shopping centre management skills and our fund management expertise should ensure that the fund generates excellent returns and make it very attractive to new investors. Our strategy is to grow to a value of at least £2 billion ($2.8 billion) and we are convinced that this can be achieved given the strong management teams that have been brought together with the creation of the Mall Fund."

Credit Suisse First Boston and UBS Warburg are financial to Capital & Regional. DTZ Debenham Tie Leung advised Capital & Regional on the property aspects.