Centrale has new owners this morning, after Hammersons, the FTSE-100 commercial real estate company that already runs Brent Cross and Birmingham’s Bullring shopping centres, paid £98 million for the Croydon centre.
As Inside Croydon reported last August, Centrale was put up for sale together with four other centres owned by the property arm of the state of Kuwait, St Martins Property Corporation.
Then, it was widely reported that the owners wanted to raise about £1 billion from the sale of five properties; at less than £100 million for the 694,000 sq ft Croydon centre, Hammersons may have got a better bargain than anything in this week’s Debenhams sale in Centrale.In total, Hammersons paid St Martins £208 million for Centrale plus a mall in Newcastle, a retail park in Rugby and three other properties.
Centrale was only completed in 2004, and tenants in its 80 units H&M, House of Fraser and Next. But like the old Drummond centre it replaced, it has never been fully occupied.
Interested potential buyers have in the past two months had consultants scoping Centrale, and comparing the nearby town centre Vue Cinema, to seek ways of incorporating a multiplex within the centre, together with more restaurants and other suitable offerings which might attract footfall into the centre after the retailers close for the business day.
Some of the figures put out by Hammersons yesterday in announcing its acquisition provide interesting background to the retail development battle on Croydon’s high street.
The already crowded marketplace (that’s literally speaking) includes Allders department store and the Whitgift Centre directly across North End from Centrale.
Another proposed retail development nearby failed to get off the drawing board when anchor tenants John Lewis withdrew, blighting a large section of the town centre.
Centrale’s current “Zone A” (ie. premium site) rents are, according to Hammersons, around £130 per sq ft, compared to up to £200 per sq ft elsewhere in Croydon – which mostly means the Whitgift Centre.
Hammersons then say, “Average rents at the centre (excluding anchor stores) are £19 per sq ft compared to Hammerson’s UK shopping centre average of £46 per sq ft”. Some might see that as a clear ambition from the new owners to increase the rents they receive. Other rightly observe quite how bargain-basement priced floorspace in what was supposed to be a prestige mall has become.