WALTER CRONXITE reports on how more boardroom manoeuvring is threatening the long-delayed redevelopment of the town centre
There may be clear blue skies over Croydon during this long, hot summer, but there’s a dark cloud of uncertainty sitting right above the Whitgift and Centrale shopping centres.
The chances of Westfield Croydon opening in 2023, more than a decade after the shopping mall developers first got together with Centrale’s owners, Hammerson, are looking more uncertain, if a report in the Financial Times over the weekend is anything to go by.
Uncertainties at Hammerson suggest new turmoil at the “Croydon Partnership”, the shot-gun wedding forced on Hammerson and Westfield six years ago by the then Mayor of London, Boris Johnson, and his mate, Gavin Barwell, in order to push through the redevelopment of the town’s shopping centre for Gav’s chums in the Whitgift Foundation.
One report after another tells of retail and restaurant sectors’ struggles amid weak retail spending, which has created a huge discount in the share price valuation of Brent Cross operators Hammerson.
It means that Hammerson’s value on the stock market is well below what the company’s assets would be worth in private disposals. And now the corporate vultures, the hedge fund companies, are hovering to pick up juicy assets at cut-price values.
The FT reports that Elliott Management has built up a 5 per cent stake in Hammerson, to capture that extra value not reflected in the share price, which was bumping along at 526.8p in early trading this morning.
After dropping its link up with Intu and having French company Kiepierre walking away from a bid for Hammerson because the British company “did not provide any meaningful engagement”, there is a desperate need for a new strategy from the Hammerson board room. The FT reports that this will be announced tomorrow, and will be built around asset disposals to get money off to shareholders.
The FT sees this flog-off as compromising Hammerson’s involvement in the £1.4billion Croydon project, stating that the company is “reconsidering plans for big capital expenditure, such as an extension to the Brent Cross shopping centre and an upgrade of the Whitgift Centre in Croydon, both co-owned with other investors.
“Hammerson could cancel those works or sell its share.
“If asset sales are successful, Hammerson plans to return cash to shareholders, potentially through share buybacks, although analysts said it would need to ensure its loan-to-value ratio remained stable.”
Asset sales have already been announced by Hammerson this morning, with the Imperial Retail Park in Bristol and the Fife Central Retail Park in Kirkcaldy gone for £164million.
The Bristol investment was made in 2012, the same year that Hammerson got involved with Westfield in Croydon.
This morning’s sales bring Hammerson’s total proceeds from disposals this year to £300million. Chief executive David Atkins said this morning that there is more news to come during the company’s half-year results on Tuesday.
“We continue to see opportunities to dispose of selected assets in order to better deploy capital on behalf of our shareholders,” Atkins said.
“With £300million of sales achieved this year, we are already over halfway to reaching our planned disposal target for 2018. We look forward to providing a further update on disposals and capital deployment tomorrow when we report our half-year results.”
A sale of Hammerson’s share of the “Croydon Partnership” to Westfield might simplify matters in Croydon, though seeing Hammerson depart from the initiative would also lose their positive approach to the redevelopment scheme.
Whenever the scheme does eventually get built, it will be delivered by very different people than those who were at the launch by BoJo at Fairfield Halls in 2012.
As Inside Croydon reported this month, Westfield’s John Burton – who has long managed Westfield’s interests in London – is to move back to Australia and leave the company, a company itself transformed by its £18.5billion takeover by Unibail-Rodamco, a takeover that saw Westfield’s chairman of 58 years also leave the company.
Obviously, Johnson is no longer London Mayor, and is now working as a humble hack on the right-wing rag, while Barwell lost his parliamentary seat and the council leader in 2012, Mike Fisher, didn’t even get re-selected by the local Tories to stand for the council again in May.
Who’s left in 2023 to pick up the pieces remains to be seen…
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