CPP Group has announced it is to sell its head office building in York as a question mark hangs over the future of its corporate operations in the city.

The insurance company, which employs around 300 people at Holgate Park, is selling its HQ to expanding York music retailer Gear4Music for £5.3 million.

At its height CPP employed 1,200 people in numerous offices at the business park before being hit by a mis-selling scandal in 2013 resulting in a multi-million pound fine and redress scheme.

Now operating on a smaller scale, CPP says its UK operations will relocate within Holgate Park to another of its offices, while its Group level operations will continue to run from the head office building after agreeing a short term sublet with Gear4Music.

While CPP has a lease on the “Gateway 1” building, where its UK operations will be based, until March 2021, no long terms assurances have been given as to the future of the Group wide corporate operations, which include expanding markets in ten countries.

Jason Walsh, chief executive of CPP said: “I am very pleased that we have been able to realise value from our head office building so that we can look to expand our operations across the Group.

“I am equally pleased we have reached this agreement with a local York business, Gear4music, who are looking to expand their operations while remaining in York.

“The leaseback arrangements as part of the sale provides us with the opportunity for our corporate centre to remain in York for the next 12 to 18 months while longer term options are considered.

“Our UK business will relocate to another office on the same business park in York that we hold a long term lease on.”

CPP, which in its latest results reported revues of £73.6 million, says the transaction will allow the company to make better use of its assets as it seeks to invest for Group level expansion.

At Group level the business has seen revenue in its international markets grow by 33 per cent to £44.9 million. This included revenue from India, which had more than doubled to £15.2 million.

Andrew Wass, chief executive of Gear4Music said: “We are delighted to announce this purchase in our home town of York.

“Our significant growth over recent years has meant we now require additional head office space and the property provides an excellent medium and long-term solution in this respect, with minimal upheaval to existing staff central to our success.

“The property will enable us to continue to build our teams and help to position the Group for further growth.”