CLS has exchanged contracts on the conditional sale of Citadel Place, better known as Spring Gardens, in Vauxhall, London, to property developer London Square.
In a stock market filing, CLS said it will work with London Square to progress planning of a residential-led redevelopment of the site, with a planning application expected to be submitted in the first quarter of 2026.
CLS and London Square previously worked together on Westminster Tower.
The agreement includes a conditional sale, subject to criteria being achieved in relation to planning, with CLS retaining the income from the lease until expiry.
It said it expects the current valuation of the site to be achieved if the transaction proceeds to completion, including the remaining income from the current lease, with potential for further upside through an overage structure. The valuation by CLS external valuers as at 31 December 2025 is estimated to be circa £70 million.
The transaction is expected to release equity in stages over the next two years for CLS, following the repayment of existing debt.
Fredrik Widlund, chief executive of CLS Holdings, said: "We are pleased to be progressing Citadel Place in partnership with London Square, a highly regarded residential developer with whom we have worked successfully before. This agreement enables us to advance a residential-led scheme that can deliver lasting benefits to Vauxhall and its community, while retaining the income from the current lease and crystallising value for shareholders over time."