Hammerson’s annual report could be bad news for Croydon

Originally, works were supposed to have started in 2016 on Westfield and Hammerson’s imagined scheme in Croydon. Now one respected commentator says it will never happen

BARRATT HOLMES, our over-development correspondent, has been skimming through the trade press and found a damning verdict on the prospects for Croydon town centre

One of the best-read commentators on the commercial property market says that he cannot ever see another major shopping mall being built in Britain, in what amounts to another doom-laden verdict on the prospects for the £1.4billion Westfield and Hammerson scheme that was dumped on Croydon by Gavin Barwell eight years ago.

Peter Bill is the former editor of Property Week. Bill has already described the Croydon Westfield project as a “dead duckling”, following the now French-owned company dropping the scheme from its development pipeline earlier this month. But Bill has been reading the Croydon scheme its last rites since 2018 when he described it then as “this blighted project”.

In his latest column for Property Week, Bill suggests that the publication on Tuesday of the annual report from Hammerson, half of the “Croydon Partnership”, will sound the death knell for the scheme.

For while times is tough for mall developers Unibail-Rodamco-Westfield, they’ve been tougher still for mall operators Hammerson, the owners of Croydon’s Centrale, who have borne the brunt of the rapid downturn in high street retailing.

Peter Bill: knows about commercial property

“Next Tuesday Hammerson will declare its 2019 results. Past figures have not been as bad as imagined from a company holding £9.5billion of largely retail assets. Rents are up from £305million in 2014 to £347million in 2018. Occupancy? Bumbling along around 97 per cent. Trading profits? Up from £174million to £240million. Total returns have nose-dived from 13 per cent to zero. Negligible rental growth and falling capital values have seen to that,” Bill writes.

He points out that Hammerson’s share price has collapsed, from more than 600p five years ago to 230p last week, “wrecked by carnage among retailers”.

It was Bill who two years ago aired his scepticism about the prospects for the Croydon scheme to Jo Negrini, the chief executive of the council. Asked what contingencies she and the local authority had made if Westfield or Hammerson decided to pull the plug, Negrini said, “We’re not stupid.” Oh, how we laughed.

Negrini, the self-declared “regeneration practitioner”, in some respect owes her current £220,000 per year position in Croydon to her previous post, when she spent four years, to 2014, at Newham as their director of strategic regeneration, planning and Olympic legacy, working closely with Westfield on their Stratford supermall.

Yet there seems little sign of that experience helping to deliver a temple to retail in Croydon. Bill was one of a handful of journalists invited to a Hammerson drinks reception last month. “What are you and that French outfit that took over Westfield going to do about Croydon?” was asked. The topic, Bill says, caused “embarrassment”.

As far as Bill is concerned, the Croydon scheme was as good as finished in December 2017.

Then, the Westfield-Hammerson partners had just obtained a revised planning permission – at their instigation, not the local authority’s, as Croydon’s mendacious Tories would have it.

The revised scheme doubled the number of “luxury executive apartments” they would build over the shops. London Mayor Sadiq Khan helpfully waived his requirement for 30 per cent affordable housing, on grounds of viability – ie. not big enough profits for the developers. And a requirement for £12million in community infrastructure payments from Westfield, towards tram improvements, was also dropped.

Council CEO Jo Negrini: not stupid. Apparently

Then, as Bill puts it, “the elephant that was that Unibail-Rodamco paid $25billion to swallow the Westfield kangaroo”.

And as a consequence, Bill says, “Croydon has now been spat out.”

Bill has some advice for Hammerson. They “will be wise to not fudge on Tuesday, when asked what it proposes to do with its half stake”, he suggests.

It is, though, in his conclusion that Bill – clearly a fan of Negrini’s fellow Australians who used to own and run Westfield – delivers a damning judgement for the future of Croydon town centre.

“Let’s give what was Westfield a belated cheer. When the Aussies came to England more than 20 years ago, no one gave them much of a chance. I remember writing rude things. But without the energy and expertise of Westfield European boss Michael Gutman and his energetic deputy John Burton, two of Britain’s most successful retail centres would never have risen in east and west London.

“Can’t see another arising, ever again.”


About insidecroydon

News, views and analysis about the people of Croydon, their lives and political times in the diverse and most-populated borough in London. Based in Croydon and edited by Steven Downes. To contact us, please email inside.croydon@btinternet.com
This entry was posted in "Hammersfield", Business, Centrale, Croydon Council, Jo Negrini, John Burton, Planning, Whitgift Centre and tagged , , , , , , , . Bookmark the permalink.

12 Responses to Hammerson’s annual report could be bad news for Croydon

  1. Charlotte Davies says:

    Perhaps without the obsessive focus on shopping malls we could come together and design a town that the community want. We are knee deep in Arts projects and we have internationally recognised niche stores. We have Elizabethan heritage that is barely celebrated. And film and railway heritage. We have a town of faiths and many philosophical discussions – could we celebrate this with an inter-faith and peace centre; we are very good at social integration we could perhaps develop and market our skills in this area. We could make Croydon a delightful place to live and raise a family. We have fantastic food diversity – we could become a place to go to buy and eat great food. We are a rich community with great energy let’s find a shared vision and make it happen for ourselves and forget pleasing a load of property investors in shopping malls….. we have had too many years that have felt like waiting at a bus stop when if we had started walking and gone under our own steam we would have made more progress…

    Liked by 1 person

  2. sebastiantillinger7694 says:

    Let’s get real here.

    Name five things Negrini has done in the past couple of years which warrants her £220,000 salary.

    Four things?

    Three things?

    Two things?

    Anything?

    Time for Negrini to go – she does not deserve her salary. And Croydon deserves so much more than her.

    Liked by 1 person

    • David Taylor says:

      Get her out as soon as possible

      Liked by 1 person

      • Let’s stop saying it’s all down to Jo Negrini. It’s not.

        Instead, ask yourselves, who hired her and why? Politicians who wanted her to build a massive new shopping centre, that’s who.

        The rise of internet shopping and the general economic decline means that demolishing the Whitgift to build a sparkling replacement is no longer a viable proposition.

        It’s time the whole daft idea was stuck in the same place as the other stupid notions, like “Park Place” and concreting over our green spaces. Put flats where they are needed – close to shops, transport and entertainment and facilities – in the town centre.

        Liked by 2 people

        • There seems a very strong possibility that Negrini was hired, initially in an exec director role, on the strong say-so of Westfield. John Burton, who worked on the Stratford scheme in Newham, may have even put in a good word, or provided a reference.

          But replacing a shopping mall with a bigger shopping mall in Croydon by 2012 was *never* a viable option.

          That Barwell abused his position as an MP to help the Whitgift Foundation is why we are in this situation now. The leaseholders, with Hammerson, had a more modest scheme, “oven ready” as Creatura likes to say, and ready to go.

          But the Foundation and Barwell wanted something grander, and bigger, and much more costly, and they dragged in Westfield, and Boris Johnson.

          And we all know what happens with big-ticket projects Johnson gets involved with…

          Liked by 2 people

          • sebastiantillinger7694 says:

            I didn’t know this – it explains the tangle of relationships and the deep mess centred on Westfield. And when you remove the individuals from the tangle and judge them as individuals in context of their roles and you realise it’s all the wrong fit. Negrini is not an ideas person, nor leader, nor thinker. The only thing she does is place herself where the aforementioned orbit in the hope some of the glow falls upon her.

            It’s just not good enough, it so much less than this borough needs and deserves.

            I’ve heard firsthand from someone who was close to the Mayor’s Borough of Culture decision process that Croydon’s pitch was; “you have to help up us, Westfield’s gone, we’re becoming depressed, please, please give us this boost”.

            What a way to put yourself on the Greater London stage !! The weak, feeble, ‘woe-is-me’ politics of Tony Newman. This is NOT how I want my borough to be represented, and certainly not by the individuals concerned.

            Liked by 1 person

  3. And Newman, Scott and Butler can carry her bags for her.

    Liked by 1 person

  4. Nick Davies says:

    Hammerson watchers may wish to note a piece buried in the business pages of today’s Grauniad. It’s clear they’re walking away from shopping centres as fast as possible.

    The obvious (to me) quick fix now is to revert much of the Whitgift and Centrale to a traditional street pattern, and with five or six story residential blocks with local shops, cafes, and whathaveyou at street level.

    Liked by 2 people

    • Spot on. I’ve thought from the start that unique local shops are the way to go. Somewhere that people would want to visit with things that you can’t get online and where the staff are actually interested in their customers, rather than standing around looking bored, if you can even find them.
      Trouble is, I don’t suppose they could pay the rents that Hammerson are looking for.

      Liked by 2 people

    • sebastiantillinger7694 says:

      Yes, perhaps. But not under the current Croydon Palace team – they will mess it up for our next generation. They are not thinkers or originators. Perhaps it should go to an international ideas competition – or we employ Renzo Piano to sort out CROYDON centre post Westfield…..?

      Liked by 1 person

  5. Lewis White says:

    40 years ago, when I was studying Estate management, a lecturer told us ” Big companies with big offices and office workforce need to be located in town centres with shops– so that the employees can pop out at lunchtime and do their shopping” . Sadly, Croydon was deserted by Nestle, and some other big employers, and the area of shops are now in excess of what the modern internet click-ordering generation needs. Lunchtimes are not what they were.

    I can’t see any future for the Whitgift without a reduction in shopping and addition of high (-ish) rise residential.

    I sincerely hope that they redevelop it , not with the usual boring and bland covered “mall”, but something along the lines of Nick Davies’ vision of traditional streets, with good modern buildings of varying sizes made of good quality brickwork, and of a human scale AND open to the sky and sunshine, AND with well-planned squares and some trees , linked to the High Street.

    No doubt, it will take a developer willing to depart from the hitherto successful “formula mall”. Do the Aussies or Hammersons have the DNA to do this?

    The presence of more and more people living in the town centre, in high blocks, who might not be car users, should be good for the remaining shops, and encourage a greater diversity of shops, as the car using suburb-dwelling masses seem to have deserted the shops for the FREE parking of the Purley Way.

    The question is–how many more years will it be, before Whitgift redevelopment?.

    Liked by 1 person

  6. mraemiller says:

    The problem is not the Whitgift Centre its self. It could do with some change but knocking the whole thing down in one go in order to rebuild it was never a good idea.

    Firstly when CPOs which are an extreme tool of the state and should be a method of last resort were invented they were for things like building motorways and widening bypasses. The use of them to buy small shops in order to build bigger shops is wrong and anti-competitive.

    The Westfield-Hammer-Whoeverelsethey mergedwith scheme to have the whole of the town centre owned by one property developer who bought large chunks at CPO prices actually represents something like one of Stalin’s five year plans.

    Like Stalin’s 5 year plans by the time it was completed it was going to be outdated.

    By allowing one company to have such power over such a large are the Council has displaced a huge number of small businesses. The reason the Whitgift Centre is so empty is because the Council constantly threaten to knock it down. Thus many large retailers such as Sports Direct long ago decamped to the Purley Way. Its the George’s Walk farce all over again when all the units there were emptied for a development that wasn’t going to happen for a decade. As soon as that was aborted they filled up again.

    By CPOing such a large area of the town centre and gluing it onto the Whitgift Centre the Council has also become beholden to WHU putting its self in a terrible negotiating position whereby having no fallback plan leaves them at the mercy of the developers whims and caprices to ramp up the number of housing vs retail units.

    And let’s be clear. The problem with the Whitgift Centre isn’t that it does not make a profit. It is that it doesn’t make a large enough profit for the Whitgift Foundation. They have decided that retail does not make them as much money as housing would. The whole weneedtobulldozeashoppingcentretobuildashoppingcentre explanation originally offered was clearly a layer or sugar on the bitter pill that the Whitgift Foundation regards its Centre as a failure that should be housing. Nevertheless politicians of both sides swallowed this pill whole and we are now suffering the side effects.

    Crucial questions remain unanswered. Such as why does the Whitgift Foundation’s desire to rebuild the Whitgift Centre require the forced purchase of other sites? While, fo example, Croydon Village Outlet resembled a department store that was being run by Trotters Independent Trading the fact that anyone tried at all flies in the face of what Gavin Barwell said to me a decade ago that no other retailer would move into this old site because it was too old hat. The truth is that these people represent the real entrepreneurship in retail the government should be encouraging but for some reason it seems to despise small businesses… Being obsessed instead with Business Investment Districts and other Blairite schemes to increase business rates.

    Still it could be worse. They could have demolished the whole centre to a pile of rubble and CPOed lots of land as well only to run out of money. At least they ran out of money before starting. Perhaps it would be prudent if Councils want to undertake such schemes in the future to at least insist on cash upfront in return for the CPOs so that companies like WHU wouldnt waste everyone’s time. The again if they’d had to make concrete commitments maybe the plans they drew up wouldn’t have been so grandiose.

    This scheme is the very worst of public private partnerships… Everyone involved should be ashamed.

    Like

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