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.
“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.
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.”
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