Two modest-sized shops in the centre of Brighton have been snapped up for £4.6 million - reflecting the commercial draw of the city.

The freehold on the building housing clothes shops East and Hugo Boss in East Street was bought by commercial property company CB Richard Ellis.

The two-storey building covers 394sqm (4,000sqft). The deal means retail space in the centre of Brighton is now worth a staggering £11,650 per square metre.

A lack of commercial space in the city has seen prices soar.

According to a recent council report, there are 170 high street retailers, including House of Fraser and T J Hughes, waiting to move into Brighton.

The income of shops in the city last year totalled £1.6 billion and could rise to £2.8 billion by 2016 if those retailers that want to trade in the city are given space Tony Mernagh, executive director of Brighton and Hove economic partnership, said there were several reasons why the premises in East Street attracted such a high offer.

He said: "The first thing to remember is it's two shops so there's an opportunity further down the line to create one big shop and that attracts a premium.

"East Street is still considered to be one of the classier streets in Brighton and Hove, if not the classiest in the city, and again that attracts a premium.

"And, of course, it already has tenants - and good, reliable ones at that so it is making money straight away.

"That has to be attractive to investors."

Business leaders say redeveloping Churchill Square would be one way to accommodate more high street names - and attract more visitors.

Brighton and Hove is already expected to lose up to three per cent of its income to Crawley because John Lewis is opening a store in the town.

Mr Mernagh said: "That whole building in East Street is 4,000sqft.

"Most of the big-name high street shops are really looking for something in the region of 16,000sqft so that gives you an idea of the problems we have in terms of attracting major retailers."

Mr Mernagh has backed Brighton and Hove City Council's plans to replace the Brighton Centre and expand Churchill Square to open it up to views of the sea.

The Kingswest building on the corner of West Street and King's Road, home to the Odeon cinema, would be demolished and more retail space would be made.

The list of retailers vying to set up in Brighton and Hove has increased the value of the city's premises.

The freehold for the building that houses the Strada shop in North Street, Brighton, last year sold for £5.1 million. Number 51 East Street is let to East on a 25-year lease at £101,000 per annum and 52 is let to Hugo Boss on a 15-year lease at £140,000 per annum.

London-based CBRE bought the property from another investment company, RREEF, which was represented by estate agent Savills. Jeremy Lovell, director of Savills retail investment, said: "Brighton is a powerful retailing centre with major high street brands and excellent future rental growth prospects."