Chinese whispers increase fears for £500m Queen’s Square

The stalled regeneration of the town centre has suffered yet another blow, possibly a terminal one to a project worth half-billion-pound, which centres on refurbishing the landmark Nestlé Tower, and was seen as among the most significant developments proposed for what was once called Croydon’s “Growth Zone”.

Stalled: the planned conversion of the landmark Nestlé Tower offices into flats has not made any progress for nearly two years

Employees of a construction firm hired by Chinese developers R&F Properties have walked off site from another of their schemes, in Battersea, because they say the main contractor has not been paid.

R&F Properties are also the owners of Croydon’s Nestlé Tower, where work on its £500million redevelopment ground to a halt in 2020, ostensibly because of covid. But after nearly two years of zero progress and R&F’s continuing financial difficulties, hope that work in Croydon will resume any time soon must be vanishing quickly.

The reports of similar problems at R&F’s £900millions One Nine Elms development in Battersea have appeared in the trade press, Construction News.

Work on One Nine Elms began in 2018 and after a pause for the first lockdown, the Battersea build resumed. Until, that is, this week.

Down tools: workmen have abandoned One Nine Elms’ prestige development of two Thames-side towers after Chinese developers failed to make payments to the lead contractor

Work on that scheme’s 56- and 45-storey towers – which include 487 flats, a 172-room Thames-side hotel and 11,000 sqm of office space – has stopped, with no information on when it could resume.

“The builders will all be gone by Friday. We are heading off now. It could be up to three months they said, but who knows?” one worker was reported as saying to Construction News.

A security guard said he expected the site would be closing altogether and was unsure when work would start again.

“It is understood the disruption began when the developer, China-based R&F Properties UK, failed to pay the principal contractor, Multiplex,” Architects Journal reports.

Earlier this month, R&F parent company in Hong Kong was put in “selective default” after it agreed with its lenders to delay a £539million debt repayment.

This is just the latest episode in an on-going crisis in the Chinese property market, which had previously enjoyed two decades of uninterrupted, booming growth, all built on mountains of debt.

Inside Croydon reported in September last year that R&F Properties was struggling to meet the Beijing government’s new rules to reduce developers’ debt.

In March 2017, R&F paid Minerva £60million to buy the Nestlé Tower, together with St George’s Walk beneath it and the neighbouring Grade II-listed Segas House.

The Tower, which had been the purpose-built British HQ of the Swiss food multi-national since the early 1960s, has been vacant since 2012, when Nestlé quit Croydon in huff over the lack of help from the then Tory-controlled local council.

With the vicinity around that part of Croydon High Street and Wellesley Road suffering years of development blight and uncertainty while the properties were in the hands of Minerva, on taking over the new Chinese owners came up with plans for what they called Queen’s Square, beginning with the repurposing of the 22-storey office block into 288 private flats while providing a civic square between St George’s Walk and the Town Hall.

There has been no information on when work on the Croydon project might resume.

Nothing going on: the Nestlé site has been mothballed for almost two years

The delays in delivering what was presented as a “prestigious” and “iconic” development will be just the latest blow to “ambitious” Croydon and discredited ex-CEO Jo Negrini’s town centre “Growth Zone”.

It is another blow following the long-predictable collapse of the £1.4billion Westfield scheme for the Whitgift Centre.

The Nestlé Tower, of course, stands right across the road from the Fairfield Halls, scene of another development disaster, the £67.5million fiasco of a refurbishment by Croydon Council, and the College Green site next door, which last month was sold off by the council to another developer.

The Tower and the St George’s Walk sites have been through the redevelopment mill before. In the early years of this century, something called Park Place was proposed by Minerva and LendLease. They intended to build a mixed-use development including a department store (remember them?) for John Lewis (remember them?).

A Compulsory Purchase Order was agreed by the council in 2007, but the then Tory-controlled authority pulled the plug two years later after LendLease walked away from the project and Minerva was unable to progress the scheme.

Minerva nonetheless made an estimated £50million profit from doing nothing with the site before the sale to R&F eight years later. 

R&F’s plans for Queen’s Square are supposed to see the main tower increased to 28 storeys, while an adjoining five-storey office building is supposed to be stretched into a seven-storey block of 63 mixed tenure residential units, with commercial uses at ground level.

But the way things have progressed, or failed to progress, since March 2020, it is beginning to look as if Queen’s Square is going the way of the abandoned developers’ dreams of Croydon Westfield and Park Place.

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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, Growth Zone, Housing, Jo Negrini, Nestle Tower, Planning, Property, Segas House, St George's Walk, Whitgift Centre and tagged , , , , , , . Bookmark the permalink.

6 Responses to Chinese whispers increase fears for £500m Queen’s Square

  1. derekthrower says:

    I think we can safely say this project is as dead as the proverbial dodo. The parent company in China recently avoided defaulting by the skin of it’s teeth and with it’s credit rating in tatters will probably be looking to divest it’s foreign holdings to recover some liquidity.
    https://www.fitchratings.com/research/corporate-finance/fitch-downgrades-guangzhou-r-f-idr-to-rd-on-completion-of-exchange-offer-14-01-2022

  2. Ian Ross says:

    Re Negrini I’d add to “discredited”, grossly overpaid and obscenely overpaid to go.

  3. Emma Frazer says:

    Just as well, as there are enough towers of flats going up in Croydon. The old Nestle site should be turned in to something other than flats

  4. Lancaster says:

    ‘Growth Zone’. Another of Negrini’s bullshit buzz phrases; what a crock.

  5. miapawz says:

    I’d rather flats were built in the centre, than nice family homes getting detonated all over the borough. But it seems that the Chinese property slump has come home to roost.

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