A day early, Croydon has suffered a Valentine’s Day massacre, as the French owners of Westfield announced a multi-billion reshaping of their investment plans – with their Croydon project described as a “£1.5billion dead duckling”.
And it seems Croydon Council has been expecting the worst, as for the first time in a decade there will be no delegation from the Town Hall heading off to the South of France next month for MIPIM, the global property developers’ conference, piss-up and hookerfest.
It is exactly one year since Westfield announced that they were to “review” their plans for the regeneration of Croydon’s two shopping centres, the ageing Whitgift Centre and the Hammerson-owned Centrale.
Today’s latest update came in the form of a gloomy annual report from parent company Unibail-Rodamco-Westfield.
Trade publications reported that URW is to “scale back its development pipeline”, following another grim year for the retail sector. Rental income from Westfield’s UK shopping malls – including Stratford and Shepherds Bush – was down by 4.2 per cent in the last trading year.
Estates Gazette reported that URW “has reduced its total development pipeline to €8.3billion (£7billion), down from €11.9billion at the end of 2018.
“It has removed €3.2billion of projects that require major redefinition, are significantly postponed due to market or administrative circumstances, or no longer meet the group’s return requirements’.” It is a description that fits Croydon very well.
Jo Negrini: time for her Plan B
Peter Bill is a veteran property journalist, a former editor of Estates Gazette and an Evening Standard columnist. He knows how the property business operates. It was he who two years ago collared Jo Negrini, the chief executive of Croydon Council, following some grandstanding speech and asked her whether the local authority had any Plan B in case – as looked likely at that time – that Westfield would pull the plug on its dalliance with Croydon.
“We’re not stupid,” the £220,000-a-year council administrator said in a remark which has come back to haunt her and her council administration ever since.
Today, Bill indulged in a bit of I-told-you-so when he tweeted his reaction to the URW annual report. Quoting Estates Gazette, he noted: “‘It has removed €3.2billion of projects that require major redefinition’. ‘URW did not specify whether this included its development in Croydon’. [Joint venture] partner Hammerson don’t like you to mention Croydon either.
“Both are incubating a £1.5billion dead duckling.”
The Westfield-Hammerson marriage of convenience in Croydon was conducted at a ceremony in January 2013 presided over by Boris Johnson, then merely the Mayor of London, accompanied by his Tory chum, and then MP for the Whitgift Foundation, Gavin Barwell. Demolition work, already long-delayed, was finally supposed to have begun last autumn. After nearly a decade of development blight in the town centre, now the long-promised shopping palace may never materialise at all.
Boris Johnson at Croydon’s “wedding” between Hammerson’s Nelson, left, and Lowy, of Westfield, right
With observers in the industry and the City drawing the obvious conclusions, Westfield’s press office had to get busy, and they confirmed that Bill’s shrewd assessment is correct.
“URW has… confirmed this includes its development in Croydon,” Estates Gazette reported, adding, “However, The Croydon Partnership – the joint venture between URW and Hammerson behind the scheme – has reiterated that it remains ‘confident in Croydon as a destination and its potential for mixed-use development’.”
In other words, more flats. Many more flats.
“The Croydon Partnership is working on a comprehensive review of the Croydon development to respond to the rapidly changing UK market,” a spokesperson for Hammersfield smarmed this afternoon.
“As part of this review, we are focused on right-sizing the retail and introducing additional uses including a hotel and offices, alongside residential, and are looking at opportunities to reuse some of the existing buildings to ensure a more sustainable development.
“During this phase of the review, we are also working with the council and local stakeholders on the scheme and to ensure the town centre remains active.”
The Whitgift Centre is a slowly decaying, little-visited shell of its former glories
The “local shareholders” means the Whitgift Foundation, the private school-operators who own the Whitgift Centre. They have been feeling the squeeze over the past eight years, with reducing income from rents as the office space above the Centre has been long-vacated in anticipation of redevelopment, and their increasingly run-down shopping centre has slowly emptied of store operators.
Today’s announcement is potentially a huge setback for the area’s biggest charity, though despite repeated requests for a comment, Martin Corney, the Foundation’s chief exec, failed to respond.
Westfield’s partners in Croydon, Hammerson, who operate some of this country’s largest shopping centres, have also delivered some troubling figures recently – the sort of numbers which suggest that shopping centres would be a good business to get out of.
Westfield’s plans for Croydon town centre remain, at best, sketchy
Today, Hammerson sold its majority stake in a Paris shopping complex for £362million, saying that the disposal will be “used to reduce debt and strengthen the balance sheet”. The sale comes a month after Hammerson sold the St Oswald’s Retail Park in Gloucester to the local council for £54million.
Hammerson has seen its share value slide by 21.7per cent over the past 12 months, making a £319.8million loss in the half-year to June 30.
It all seems to suggest that Croydon’s Negrini, who without any modesty describes herself as a “regeneration practitioner”, has no need to fly off to Cannes for a bit of springtime Mediterranean sun with the oligarchs, property speculators and billionaire tycoons who attend the annual MIPIM conference.
MIPIM was once described by Tony Newman, the Labour council leader in Croydon, as “a junket”, but that never saw him putting an end to local authority employees traipsing off to the South of France once he took control of the Town Hall six years ago.
Negrini, and three or four of her closest council colleagues, have been regular attenders at MIPIM, apparently extolling the attractions of Croydon’s Westfield future, usually at a cost of tens of thousands of pounds of Council Tax-payers’ cash.
But a Freedom of Information Act request by Inside Croydon has revealed that there is to be no council delegation attending MIPIM in 2020. Which should, at least, give Negrini more time in her office in Fisher’s Folly to try to extricate herself from the mess she has created around Brick by Brick…
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The council may not be attending MIPIM but BxB and 31Ten Consulting are….the train is not devoid of gravy.
Well, well, well, what a surprise – well it seems to be for those who “are not stupid” but is much less so for those residents who can see the facts for themselves and have witnessed the fall of the town centre, from Kennards, Allders and Grants to what we now have. Even if it all became flats it will be better than empty office space earing nobody anything and perhaps these hundreds of new residents will spend a little cash in the remaining shops in North End.
The only surprise is that it has taken the “regeneration professionals” so long to publicly admit what the rest of us have known for a number of years.
We can now await Negrini’s Plan B. There is a hint that property prices are rising so that may help in a more housing based development but there is the issue of oversupply of 1/2 bedroom flats to consider. With HS2 being confirmed, north London may become more attractive to the detriment of developments south of the river.
The botched Fairfield development and “extended pause” in proposals for Whitgift will hardly assist in marketing flats etc in central Croydon.
“We’re not stupid,” the £220,000-a-year council administrator said” said simply to delay the inevitable as long as possible before resigning. Maybe she should return the millions she has earnt unless she can come up with a magnificent Plan B.
Now is a crucial time for Croydon and it is all up to Negrini and the council to deliver asap.
The net effect of the loss of Westfield – which I have said was a dead duck from the beginning- and the oversupply of flats will have devastating effects on what was once a really pleasant outer London town. The centre of town has already lost any commercial impetus it used to have, it has also will to live and the ability to revive itself and will become increasingly moribund. Most of the the flats, even in a burgeoning property market, will not be sold or rented and will eventually have to become become social housing if they too are not to fall into dereliction. Don’t wait around for a Negrini/Newman plan B. There isn’t one and never has been. They and Paul Scott and co have been seduced by grandiosity and a total lack of vision and understanding of what makes a town and a community survive and thrive. Will any of them ever say sorry? Don’t wait about for that either!
“More flats, many more flats” I must be missing something here, but I can’t imagine why anyone would want to spend hundreds of thousands on a flat overlooking scenic Wellesley Road and the Croydon Underpass?
So here we are. The long awaited death of what was to be the Westfield of the South delivered by the person who apparently delivered the Westfield of the East at Stratford has arrived. (She never mentions the little matter of the Olympic Games or construction of major transport infrastructure and a railway station linking it to HS1 as the main contributors to the success of the scheme). Croydon never had such major additional investment just the hot air delivered by public relations operatives. The inadequate transport links have always been a drag on the development of Croydon in the twenty first century. At least this has been recognised now and investment has been planned on the Croydon bottleneck, but such major work will not be completed till well into the 2030’s.
What is clearly being promoted now is the importance of housing over retail and so it will not be the retail paradise sold to the public in the past. The question has to be asked what are specialist retail developers such as Hammerson & Unibail-Rodamco-Westfield doing now in this project when it has drifted so far from the original plan? It seems like this development will face considerable delay and change in the players involved.
Transport is at the root of the problem. Like it or not people are always going to prefer taking their shopping home in the boot of the car rather than on the bus or train. Road building of the scale needed to make any difference was firmly rejected in the 70s and 80s and the devastation this would bring will be even less acceptable today.
For some time now I’ve been saying that I expect the final development to be no shopping centre, but just a single street of shop fronts, with maybe a fewer larger units. The entire Whitgift Centre area behind those shops will be offices and homes. If they do try to include lots of restaurants that can only be bad for the “restaurant quarter” in South Croydon, but I guess that means BxB could then turn that area into flats. Of course, a key question if there are even more flats in central Croydon is whether East Croydon station has sufficient capacity because I’m sure they would be expensive and aimed at commuters working in central London.
Perfect storm Im afraid. This is not a Croydon problem (well it is really!), its a world wide problem. People are just not going to shopping centres in the numbers they used to, and this will only continue to reduce.
Whats needed is some quick smart thinking by Westfield, Whitgift and Croydon Council. A reduced size shopping centre, more flats, but also a hotel, cinema perhaps and desirable office space. Key is making the whole thing financially viable, ie Westfield make some decent money. For us Croydonians we just need the bloody thing done (as well as the Georges Walk development).
However as previously said whatever is agreed this will take years, probably twenty years. If Im still here I doubt I will be too old to care.
I desperately hope they get the plans in and approved very soon indeed.
Let this be the end of “I told you so”. We have to make the best of things.
This will include more flats. I do not believe that flats are intrinsically anti-social. I like mine, There are obvious advantages in not being the only one with an interest in repairing the roof etc,
The problem is not design but the fact that they come with a ****** landlord. There are, of course, both good and bad landlords but you often don’t get a choice or know whether you have picked a good one until it is too late
I would like to see Croydon promoted as a good landlord area with increased regulation and landlords encouraged to adopt standards of management and signage. And the standards branded under the Whitgift name. The Foundation already owns a number of residential properties
In Croydon (and nationally) there is a looming crisis of a lack of family homes.
An increase in flats in the centre to fill the retail vacuum creates the opportunity for planning policies that reserves land in a way that shows Croydon as somewhere that thinks across the generations.
I hope that others can see opportunity in the disappointment