Our closed-down-shops-and-malls correspondent, MT WALLETTE, on another potentially damaging turn of events for those who still hold out hope that the town centre might be ‘regenerated’ with a new shopping centre
While council leader Tony Newman was gilding the lily somewhat about a “very positive letter” he’d received from billionaire developers Westfield (a letter the contents of which Newman has failed to share publicly), it was being announced yesterday that David Atkins was to leave his job as chief exec of Hammerson.
Since “The Croydon Partnership” was established in 2012 to redevelop the town centre’s Whitgift and Centrale shopping centres, Hammerson, the owners of Centrale, have been less the sleeping partners, more the comatose ones.
But their grudging support for the partnership – the entire project was snatched away from them by the Whitgift Foundation and ex-MP Gavin Barwell, in order to bring in Westfield – has remained a crucial element in maintaining a vestige of credibility that it might ever proceed. When Atkins steps down, sometime between now and spring 2021, the £1.4billion Croydon scheme will have lost another influential supporter.
Outside the increasingly desperate Newman, there are few who now give any serious consideration to the promised regeneration project going ahead – with Croydon town centre facing the prospect of another decade of development blight.
As was demonstrated when the Aussies who ran Westfield sold out to the French owners of Unibail-Rodamco, a change at the top can often signal a change in direction. Given Hammerson’s parlous position as shopping centre owners who are not collecting much in the way of rents, Atkins’ replacement may not take long to consider the company’s position over investing in a mall they might struggle to fill.
“The current environment, exacerbated by the impact of covid-19, is undoubtedly the most challenging we have faced as a business,” Atkins said yesterday, announcing his decision to step down.
“I feel now is the right time to search for a new chief executive, a person who can not only lead the business as we emerge from this period, but also into its next chapter,”
The coronavirus has hit an already struggling business model hard.
Earlier this month it was announced that Debenhams in Centrale, having closed for the lockdown, won’t ever be reopening. According to the Financial Times today, retail landlords Hammerson received just over one-third of the rent it was due for the second quarter of the year as pandemic restrictions forced stores to shut. “The third-quarter payment total, due on June 24, is expected to be worse still, with most shops having been closed since the UK’s lockdown began on March 23,” the FT notes.
As well as Centrale, Hammerson owns Brent Cross and the Bull Ring in Birmingham.
As the Financial Times puts it, “During his tenure, Mr Atkins has focused the group on so-called destination retail, attempting to make shopping centres attractive places to visit in their own right. He also led the acquisition of centres in mainland Europe and in Ireland and the disposal of a London office portfolio.
“However, the focus on retail has left the company exposed to the decline in bricks and mortar stores, which has been hastened by an increase in online shopping and, more recently, by the pandemic.”
When Atkins took charge of Hammerson, just after the 2008 financial collapse, Hammerson’s share price had fallen from a high of 1600p to less than 400p. Today, Hammerson shares are worth just 74p, giving it a market value of £576million.
Nils Pratley in The Grauniad was less than complimentary about Atkins’ time in charge of Hammerson alongside its most recent chairman, David Tyler. “In most other industries, the duo would have been ushered out after the events of 2017-2018,” he wrote.
Detailing how Atkins had proposed sinking £3.4billion into a takeover of a shopping centre rival, Intu, Pratley says, “The deal would have been catastrophic when you see that Intu’s equity is virtually worthless today. Only a revolt by Hammerson’s own shareholders saved the day.”
Worse was to come: Atkins was offered a £5billion cash-and-shares takeover proposal from Klépierre of France. Atkins turned it down because he felt that, at 635p per share, the offer “very significantly” undervalued Hammerson. “The correct response in 2018 should have been to bite Klépierre’s hand off,” Pratley notes.
“Under Atkins, the company had two big calls to make on mergers and acquisitions. It got both wrong.”
News of Atkins’s departure saw Hammerson shares finish 6 per cent up at close of trading yesterday. Nuff said.
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