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 have been regarded as the juniors in the Croydon Partners working on building a Westfield mall
“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.
Hammerson’s David Atkins: announcement to come tomorrow
“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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What’s another year to the Whitgift Foundation, they plan centuries ahead and into the afterlife. Just means further blight and decay for the rest of Central Croydon and the remains of the still trading Whitgift Centre. What a massive shambles this redevelopment has become.
What’s the betting that right now the Tories are planning Operation Blame Labour if/when the current plans are withdrawn and replaced or stalled altogether.
There is a “blame Labour” position to take: for the past fourvyears, adopting Tory standards and approach, and embracing the Hammersfield scam and business interests, instead of robustly fighting in the interests of local businesses and residents
I do sincerely hope Hamerson don’t pull out as I was hoping that Centrale and the new Whitgift would become as one. Maybe Hamerson will sell Centrale to Westfield as part of the deal.
Centrale is already part of the partnership.
Sounds like wishful thinking David. Is this the first sign of disenchantment with the way this scheme has been handled by this Local Authority of apparently two different colours,over time, but one flag when it comes to dealing with the Whitgift Foundation.
At least it might actully be called a ‘Westfield’ shopping centre now 🙂
Went shopping in Central Croydon on Saturday, my wife who is actually from Croydon couldn’t believe how run down and dirty it had become. Dirty streets, rubbish everywhere, boarded up shops. North End full of noisy bible bashers, chuggers and groups of unsavoury looking characters hanging around on the benches smoking, drinking and panhandling. At the corner of Station Road where the really run down units are someone had dumped piles of broken furniture and old clothes. She doesn’t tend to come into Croydon anymore as she gets stuff delivered or makes occasional trips to modern malls like Lakeside, Liverpool 1, the Trafford Centre, Salford Quays. I know it’s not unique to have a tired high street, but I don’t think this level of neglect is common. The vibe it gives off is unpleasant and attracts the sort of people you don’t want and puts off the people you do want for a vibrant modern high street.
Central Croydon, between Allders and M&S, is simply disgusting and shameful now.
It’s not going to get any better.
For years now I have been reviled as I trailed my placard “Don’t worry about Hammersfield. Its not going to happen” around the area…. and now I am beginning to feel that my dour prophesy has a greater and greater chance of coming true.
If, by some strange chance of weird fate, like Boris Johnson becoming Prime Minister, it does happen, it is going to fail. It will be in a site of dereliction and decay that will simply not attract shoppers and will, once more, be the wrong thing at the wrong time in the wrong place.