Westfield finally clinch John Lewis deal for £1.4bn development

Croydon’s new shopping mall now won’t open until 2023 – more than a decade after the project was first unveiled. M.T. WALLETTE, our retailing correspondent, on today’s long-delayed ‘major milestone’ announcement

An anchor tenant coming to a high street near you… in 2023

Westfield and Hammerson this morning broke a near-six-month silence over their plans for the redevelopment of Croydon town centre to announce that they had, finally, secured the agreement from John Lewis to take space in their £1.4billion supermall scheme.

The operators’ desire to clinch a deal with John Lewis has at times bordered on desperation, and was the worst-kept-secret on the high street.

But the announcement also contained confirmation of a further slippage in the delivery for the Hammersfield centre, which the developers now state won’t be opening until 2023 – a year later than had been suggested when the scheme was granted its revised (second) planning permission this January.

It means that it will be more than a decade since the project was first announced before it is open for business.

The Croydon Partnership, the company set-up by Hammerson and Westfield for their south London joint venture, tweeted, “Delighted to announce this morning that @johnlewisretail and @waitrose will anchor our £1.4bn redevelopment of Croydon retail town centre.“The 165,00 [sic] sq ft four-level John Lewis store will incorporate a Waitrose on the ground floor, representing a significant investment by two of the UK’s leading retail brands in Croydon.”

According to the Property Week website, “The joint development secured by The Croydon Partnership is the first time ever that John Lewis and Waitrose stores have co-existed under one roof.”

The Croydon announcement comes 24 hours after Hammerson revealed that John Lewis had agreed a new lease in the 40-year-old Brent Cross Centre in north London, which is also undergoing a major refit, and doubling in size.

The former site of the Allders department store has long been assumed to be the natural home for a Croydon town centre John Lewis. Allders, for a century the pride of Croydon’s town centre shopping offering, sited on the corner of George Street and the High Street, traded on five floors with 530,000 sq ft of floor space.

What is proposed for the new John Lewis/Waitrose is significantly smaller, at abour one-third of that floor space; it is only just over half the size of John Lewis at Bluewater and one-fifth smaller than their stores at the Westfield supermalls in Stratford and at White City.

Undaunted, the Croydon Partnership hyped on: “The full-line department store and supermarket will be showcase for the two brands, creating the most contemporary shopping experience for customers, bringing the very latest concepts and services to Croydon.”

There’s been slow, even no, progress on the redevelopment of the Whitgift Centre

Today’s announcement sees John Lewis tweak its previous policy announcements that it would not be opening any new stores because of retailing market conditions. Last September, John Lewis’s chief executive, Paula Nickolds, in an extensive interview in the Sunday Times, failed to mention Croydon among the three store openings planned by the company.

The announcement also bucks the trend of gloom around the retail sector, which in recent weeks, as company annual reports have been published, has seen high street chains such as Marks and Spencer, Boots, House of Fraser, Toys ‘R Us and Maplins announce widescale closure plans, or (in the case of the latter two brands) the winding up of their businesses altogether. A net 1,700 chain stores closed their doors in 500 towns and shopping centres last year, according the Local Data Company – the worst figures since 2010.

Until today, Marks and Spencer had been the only anchor tenant announced for the Croydon Westfield.

Inside Croydon reported exclusively last July that the lengthy delays in progressing the redevelopment of the decaying Whitgift Centre (owned by the Whitgift Foundation who brought in Westfield for the redevelopment) and the neighbouring Centrale (owned and managed by Hammerson) had been caused in major part because Westfield had failed to secure any agreement from John Lewis to take space in the development.

There was also blunder last summer, when Steve Yewman, Westfield’s development director, spoke at a networking lunch organised by Crystal Palace football club’s business club and let slip that John Lewis would close their At Home store on the Purley Way and instead open a department store in the Hammersfield supermall.

The near-year-long hiatus between Yewman’s unguarded comment and today’s announcement is indicative of the tough negotiating that has gone on to finalise a deal with John Lewis. Sources suggest that this has revolved around how many rent-free years the department store will be given by the developers.

The boardrooms of Westfield and Hammerson have also both been distracted of late with multi-billion-pound takeover moves. Westfield announced in December that it would be bought by Paris-based Unibail-Rodamco in a £18.5billion deal.

Since when, Hammerson – who operate the Bull Ring centre in Birmingham as well as  Brent Cross – has withdrawn its backing for the company’s takeover of another British mall-owner Intu, and shrugged off a n approach from European shopping centre owner Klépierre.

None of which has helped speed the progress of Croydon’s “regeneration”, with the town centre, and the down-at-heel Whitgift Centre in particular, suffering as a consequence.

Croydon Partners: Westfield’s John Burton, left, with Peter Cole of Hammerson (centre), and a local politician totally out of his depth

There has been mounting concerns over the slow progress, especially among the governors of the Whitgift Foundation, which owns the freehold of the Whitgift Centre, and who depend on its commercial income to help meet the costs of running their alms houses and private schools.

It was the Foundation which invited Westfield to Croydon in 2012, when the Whitgift Centre leasees had already engaged Hammersons to oversee a redevelopment of the site.

Undaunted by the corporate feet-dragging, the Croydon Partnership today pumped out the obligatory quotes from their companies’ big-hitters regarding the John Lewis announcement.

“The decision by these two leading brands to open anchor stores in Croydon highlights the importance of this growing regional catchment and the desire from leading retailers to have a significant presence in the town,” Hammerson’s Peter Cole said, presumably with fingers crossed that House of Fraser won’t be pulling the plug on its Centrale store next month.

And Westfield’s John Burton said, “This is a major milestone…”, not just a “milestone”, then, but a major one, “… and is a demonstration of the strength of Croydon and the development. The presence of John Lewis helps ensure Croydon’s future as the retail and leisure capital for south London.”

And probably means that the long-delayed project will go ahead after all.

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22 Responses to Westfield finally clinch John Lewis deal for £1.4bn development

  1. Nick Davies says:

    “the first time ever that John Lewis and Waitrose stores have co-existed under one roof”. Err, Kingston?

  2. jackgriffin1933 says:

    My understanding is that the John Lewis site on the Purley Way is actually owned by Tesco and JLP would have to vacate in due course regardless – thus the need cut both ways, albeit asymmetrically in favour of John Lewis.

    Bloody relief either way mind.

  3. erm. have they not been to John Lewis in Kingston and spotted the big Waitrose signs??

    • This might be misreporting by Property Week, or the kind of empty rhetoric that Westfield and Hammerson have been doing for a while on all aspects of this project.

      Anyone notice how the “delivering 5,000 new jobs for Croydon” in 2012 has more recently become “delivering 7,000 new jobs for Croydon”. Of course, the existing shops provide hundreds, if not thousands, of jobs at present. The office blocks, though, have been empty for four or five years, unoccupied by any workers.

      No one has ever specified what kind of “new jobs” Hammersfield might provide.

  4. Sounds like good, albeit totally unexpected news. I may be forced to eat my words but am relieved to be reprieved. My reprieve will come to an end when I actually walk through the sacred portals of a real, not virtual, Westfield Croydon. I will, to coin yet another cliché, believe it when I see it.

  5. janetdesilva says:

    Where has the 2023 date come from? It isn’t on any of the press releases

  6. This is fantastic news. Backs up my previous optimism. Yes its late but it is and will happen. All those doom mongers can now rest easy.

    • “Late”? It was due to open in 2017, David.

      But the carrot of a Waitrose around the corner from 2023 will probably help to add another £10,000 or so to the prices on your “executive apartments”, eh?

      • My hope is that it will add a lot more than £10,000…considerably more to be honest. However I do not build on the speculation of other developments. That would be most foolish.

    • Don’t crow too soon!

      As they say somewhere else ” One Swallow doesn’t make a Summer” and, just to extrapolate a wee bit neither does one John Lewis/Waitrose make a shopping centre. Will it, I wonder, be a big, mega John Lewis of the sort they said they were not going to build again or a small,slimmed down mini-John Lewis, like the one on Purley Way, a lot of electronics and electricals, some domestic stuff, some samples and a lot of collection. My bet is on that model, the way of the future and the way that works for IKEA in the Canary Islands. The same may go for poor, beleaguered M&S who, sadly, are learning the folly or relying on what the French call “Grand Surface”. I am not selling my shares in UltraSceptic of Croydon just yet. I would also take a bet against it all being finished by 2023, around the same time that the horror of Brexit and its horrendous effect on our commerce and economy is evident.

  7. sandilands02 says:

    I suppose this now shifts the focus back into the Partnerships court, wonder what their next reason for the delay will be… probably more planning changes

    In your article, you quoted over 1500 stores have closed in malls and high streets in the UK. I agree that general shopping is falling BUT how many of those closures or empty units do you find at megamalls/ Destination Malls? All the Westfields , Bullring , Bluewater and even Brent cross have near full occupancy

    Brent Cross: https://www.hammerson.com/property/shopping-centres/brent-cross/
    Bullring: https://www.hammerson.com/property/shopping-centres/bullring/
    Bristol, etc the same
    Westfield/Bluewater: https://www.drapersonline.com/business-operations/property/why-mega-malls-are-still-winning/7029303.article

    • It’s an interesting point, and that kind of market dominance may explain why the life is being sucked out of most local high streets, leaving them with just a sorry array of fried chicken takeaways, charity shops and bookies.

    • derekthrower says:

      Some of these mega Malls are not doing too well. That is why there has been so much consolidation and failed attempts at consolidation in this sector over the last few years.

      • Chetas Patel says:

        Intu have a large number of small malls, precisely the type that has fallen out of favour in the US as well as suffering decline in the UK.

        I think a lot of them should be razed and converted into something that reassembles high streets but with good transport links and parking, quality restaurants and cafes , more for a social visit then just shopping
        Went to a small town in Texas recently and this format worked really well.
        https://goo.gl/VXWjub , https://goo.gl/bjQGbs
        Would also work for the bigger shopping areas

        I think a lot of actual high streets need to be downsized and property converted back to housing.!

  8. derekthrower says:

    Intu Derby is a mega mall. It is struggling. The greatest influence on the retail sector is not the size of malls, but consumer demand. In the UK productivity growth has stalled for a decade. This means per individual this country is getting relatively poorer when taking inflation into consideration. The point you could make is that Intu have a large number of older malls which have become obsolete, faced increased competition and can be transferred to other uses. The simple size of a Mall is not the main determinant of if it will be successful.

  9. derekthrower says:

    Intu Derby is a comparable case since it is also holds a cinema and a large number of restaurant chains on the upper floors. Further the retail floor space is almost the same as that alleged to be redeveloped at the Whitgift. Which your wikipedia post helpfully shows.
    If you want more evidence of Derby Intu’s economic woes. Don’t think a chocolate shop will really compensate for the loss of such an anchor tenant.

    Further if this is all so unproblematic why not just go ahead and complete the project? You state “prices will eventually readjust if that does become an issue”. If prices fall this project will become unviable to the developer. Perhaps you have suggested a new name for the development. The Eventually Centre !

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