Westfield’s boss admits covid was ‘nail in coffin’ for Croydon

There’s no prospect any time soon of French-based developers ending the decade-long blight to the Whitgift Centre, according to the CEO of  Unibail-Rodamco-Westfield. By our retailing correspondent, MT WALLETTE

Shape of things to come: Les Ateliers Gaîté, a much smaller development in Paris, could be URW’s model if anything is ever built in Croydon

Covid was “the final nail in the coffin” for the £1.4billion plans to build a vast Westfield in central Croydon, according to an interview with the boss of the Paris-based company which owns the shopping mall developers.

According to the interview with Jean-Marie Tritant, the chief executive of property giant Unibail-Rodamco-Westfield, in today’s Sunday Times, “I think we went too far,” even with another project in London that was less than one-third the scale originally proposed for Croydon.

The Tritant feature suggests that URW is in deep financial difficulties, and it outlines the abandonment of the mega-mall model which once saw Westfield build their temples to retailing at Stratford and Shepherd’s Bush.

In the article, Tritant insists URW is still committed to developing Croydon – though Inside Croydon’s loyal reader will have heard all that many times before. “But whatever emerges is likely to more closely resemble Les Ateliers Gaîté than Westfield London,” the Sunday Times says.

Les Ateliers Gaîté is the recently completed development in Montparnasse, Paris. It includes a 32-storey hotel, 60 shops, co-working offices and 62 modular flats. Built for £430million, it is modelled on the idea of the “15-minute city”, with people living on and around the mixed-use site.

‘We went too far’: URW’s Jean-Marie Tritant

According to the Sunday Times, “The scheme is unrecognisable from the two giant shopping centres that URW owns in London.”

Tritant says, “If we were to redo Westfield London or Westfield Stratford today, we would integrate mixed uses even more. More of our new projects will be delivered with this vision.” Think Boozepark, but with hundreds of flats over the shop.

URW removed Croydon from their “pipeline” of developments in February 2020 – before any impact of covid could ever possibly have been evaluated. Today, their “asset portfolio” proudly displayed on the Paris-based company’s website lists 109 different locations –  hotels, offices and shopping centres – including Westfield Stratford and Westfield London at Shepherd’s Bush. The list includes a number of assets that are listed as “in development”.

Croydon does not appear on URW’s asset portfolio page at all.

Truth is, URW’s “re-evaluation” of the Croydon project has been going on since at least March 2019.

It was Tory-inspired Brexit that did for Croydon’s Westfield centre.

The then CEO of URW said as much in a letter to Tony Newman, Croydon’s council leader, nearly four years ago.

Newman, Jo Negrini, the council chief exec and the council’s lawyers spent nine months trying to block the publication of that letter, only releasing it to Inside Croydon after they were ordered to do so by the Information Commissioner.

Not happening: Croydon Council’s leaders have known URW were not going to proceed with the Croydon scheme for four years

In the letter, dated March 20, 2019, Christoph Cuvillier, Tritant’s predecessor as URW boss, stated, quite baldly: “There remain, however, significant challenges as regards the UK economy and the political outlook in the near future.

“This is compounded by the deep structural changes currently facing retailers… in addition to Continental European retailers suspending plans to expand into the UK because of uncertainty linked to Brexit.”

A year later, before the effects of the pandemic could be known, in the last detailed statement issued by the Croydon Partnership (the joint venture formed in 2012 by what was once plain old Westfield and Centrale’s owners, Hammerson), they were already talking about “a vibrant, mixed-use development”.

“We are reviewing the development to ensure it meets the future needs of the community, including a viable mix of retail, dining, leisure and uses such as a hotel, offices and residential space.” So nothing much has changed in the platitudes being offered for two and a half years.

As Gavin Barwell, the former MP who brought Westfield into Croydon in the first place, noted at the time of that statement, it represented “a significant scaling back of ambition”.

And that scaling back seems likely to continue for some time yet, as URW has to untangle itself from the debt it had built up in the two decades before covid.

Asset portfolio: Croydon doesn’t feature in URW’s own lists

While URW’s existing two London centres have been ranked as among the best in Europe, even these supermalls have lost 43per cent of their value since 2018.

Ahhh… 2018. What should have been the first full year of trading for Westfield Croydon, had all the expansive (and expensive) plans first revealed 10 years ago ever come to pass. That was the year, instead, when Westfield opened its £600million extension to Westfield London, in Shepherd’s Bush.

Today, that shopping centre’s House of Fraser and Debenhams stores, once the mainstays of any half-decent mall, stand empty. It hardly augurs well for any hoped-for redevelopment of Croydon’s tired old shopping district that Tritant admits that even the Shepherd’s Bush expansion was a mistake.

“I think we went too far,” Tritant told the newspaper.

“The mistake is maybe not the size but the way we thought about it. We should have been thinking more of mixed-use.

“When you talk about entertainment in a mall today, it’s mainly cinemas. So you need to bring other uses like eSports, gaming, virtual reality, immersive experiences… like virtual visits to the Pyramids.”

There’s work going on on the ground level of the old Allder’s building in Croydon for a virtual reality “immersive” experience, though even that appears to be running behind schedule.

With Tritant’s company having to balance the demands of its debt burden, with interest rates rising, adjustments to URW’s existing assets, to keep them viable and operating, are likely to be prioritised over building anything new, such as in Croydon. That former House of Fraser store in Shepherd’s Bush will be turned into a co-working space with a roof-top restaurant and a health club, Debenhams is to be filled with entertainment outlets, and across the city, at Stratford, the retailing giants are planning to become residential developers, with flats or student accommodation.

Shut up shop: House of Fraser at Westfield London never re-opened after lockdown. URW is turning the store into a co-working space

The equation for Tritant and URW is all there in the numbers: URW owns 80 shopping centres and 30 offices in 12 countries. These properties have a net value of €22.8billion. But URW’s stockmarket valuation is just €6.5billion, not even one-third the value of its assets. For a property company, this is a problem.

And then there’s another problem. URW has €23.3billion of debt.

It was this imbalance on the corporation’s balance sheet which led to a boardroom battle two years ago, which became another factor in the development paralysis that has blighted Croydon’s town centre so badly for more than a decade now. Cuvillier was ousted as CEO, Léon Bressler took over as chairman and he appointed Tritant to chief executive, with a brief to flog off the company’s American assets.

Even that plan stalled, in the face of the gale-force business headwinds from covid. No one wants to pay top dollar for a shopping mall in the middle of a pandemic.

And so it appears that Croydon will remain in an impasse for some time yet.

Of course, Tritant talks up his business’ prospects. But he cannot reverse history, and he cannot return to the retailing glory days before online shopping took such a hold.

“Covid was the biggest stress test in the world,” he says.

‘Tough times ahead’: Tritant does not hold out much hope for Croydon

“You saw online sales going through the roof, so Amazon opened more warehouses and hired more people. But what happened when we had the right to reopen? People came back. Now online sales are exactly where they would have been without covid.”

The newspaper report says that the business mogul was dismayed when he saw shoppers, post-lockdown, queuing outside stores to return items they had bought online.

“But after speaking with retailers, I realised it was a great thing because it showed these stores were key.” You can almost hear Eric Idle singing the opening lines of “Always look on the bright side of life…”

Fewer, bigger stores in flagship destinations is now the mantra.

Despite a recovery in rent collection and footfall since the pandemic, URW’s shares are stuck around the level they were in 2020. Its debt is fully hedged for the next five years, but URW still needs to refinance about one-fifth of its borrowings within the next two to three years. The newspaper report quotes a City analyst as saying Tritant “has been dealt a difficult hand: the cost of money has gone up and the value of the assets is going down”.

There remain doubts in the markets about whether URW will be able to sell its 24 American shopping centres even at book value.

“There will be tough times ahead… but I am not overly pessimistic,” said Tritant. A visit to the site of his company’s unbuilt Croydon megamall would probably alter that cheery disposition.

Read more: After wasted decade, Mayoral candidates need town centre plan
Read more: Westfield letter that Tony Newman didn’t want you to see
Read more: Wait-field: now Labour council leader Newman calls it a ‘mess’
Read more: Scaled-down town centre development could take 10 years

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", Allders, Business, Centrale, Croydon Council, Debenhams, Gavin Barwell, House of Fraser, Jo Negrini, Tony Newman, Unibail-Rodamco-Westfield and tagged , , , , , , , , , , , . Bookmark the permalink.

12 Responses to Westfield’s boss admits covid was ‘nail in coffin’ for Croydon

  1. Lewis White says:

    Assets at most £ 22.8 billion…debt £ 23.3 billion?
    Ce n’est pas bon !

    On the positive side– just a thought- the development in Paris looks so fantastique, maybe URW could save themselves a Mont Blanc of Euros by building a replica of the same in Croydon. Would save a heap on architect fees and new drawings!

    Croydon as the Barcelona of South London is distinctly soooo passeeee.
    The Paris du Sud Londres is the new thing for the post covid era.


    And with global warming, what better than to convert the boring clipped grasslands of the Purley Way playing fields to become a new vineyard in which to re-establish the vignobles soon to be non-viable in the Champagne region of France.

    Chateau Purley Way, and Cuvee Tritant, from the URW House of Croydagne.
    Bottoms Up !!

  2. A really enjoyable, interesting and significant article, thank you.

    I only hope that the powers that be in Croydon are able to read it and think (an oxymoron I am sure) about how to redevelop the town. If the answer is just more flats and failed big shops we will face more than a decade of increasing dereliction.

    There are many ways of growing (oh, how I hate that Trussism) a community and big is not the only answer. Look at Tooting, St. Albans and Berkhamsted and you’ll see what I mean, thriving communities all.

    • Lewis White says:

      Tooting has the Common, St Albans a massive Abbey and the remains Roman city of Verulamium, and Berkhamstead a pretty high street, a castle, a canal, and loads of decent real-ale dispensing pubs. They all have homes of varying sizes. Whilst they all have their less fanstastic areas, they seem very popular as places to live, and (to a degree) shop.

      None were the South East’s Mini-Manhattan of the last 20 years of the 20th Century, so lack the legacy of malls and oiwer block offices..

      Croydon has a beautiful Minster, a wonderful concert hall, and a once ultra busy street market , good, scenic parks at Duppas Hill, Water tower Hill, and Waddon park– plus a few pubs as good as those in Berko.

      Plus too much mall shopping for today’s internet-ordering world.

      Looking at the ghost town that includes modern George Street and the empty area of High Street between the Flyover and George Street, I wondered how we could get to this, from the chock-a-block streets of the 1970’s to 90’s.
      More to the point, womdered how we can get out of this zombie current era.

      Hopefully, the high rise flats nearing completion or conversion will make a big difference–but what of the Whitgift Centre–and Drummonds across the road?

      Is the answer to create fake streets ? The Whitgift Centre was essentially a school set in a big playing field, an almost “green field site” up to 1965, not a set of Medieval streets that were knocked down as they were in Coventry and Brum.

      Fake streets with blocks of flats above and shops below. (OK, a smattering of restaurants too, but a town cannot live by cafes alone…..)

      With some sunny, sheltered open spaces at nodal points, like city squares, and a few trees at selected locations. A covered market ? (I’m gonna get shot down on that one) . A city centre lido ?

      Why isn’t someone- developer- council– coming up with some sketch plans for public consultation?????

  3. derekthrower says:

    As we progress with this debacle the underlying desperation in trying to producing anything is becoming more self evident. So all that appears to be really possible is something on the scale of the original development back in the early part of the last decade before those visionary politicians Barwell & Johnson decided to meddle and produce a super scale project of the South to compete with those at Stratford and Shepherds Bush. Even the developer in retrospect now admits the overreach of such a vision. Perhaps Barwell will launch a bid for Croydon to hold the 2036 Olympics.

    Where does this leave the Council and it’s residents in all this. Negrini and the gang spent millions on compulsory purchase orders to facilitate the development of the Whitgift Centre and this investment if we can call it that looks as good as the investment in Brick by Brick. To stay in force a CPO does require a development to actually take place. Now there is some game being played here isn’t there. URW clearly has nothing in the pipeline and the only thing they are holding out as a cherry of development clearly does not require the CPO’s which have been enforced. So are they trying to hang on with all their debts to get some return out of this by finding some other white knight Developer to take this all on while Croydon just waits as they hope something turns up. Croydon has already taken a massive hit already. When does it get to the point that the only way to move forward is to call URW’s bluff and withdraw the CPO approval for URW and allow some practical useful development to take place along with the reduced retail consummate with the needs of today. It is time to face up to this no win situation and ditch a virtually bankrupt Developer for something to happen in our remaining lifetimes. Doubt our great part-time Mayor would have the guts to contemplate this as the blight will continue long after he is no longer required to pop into Weatherhill House for a few hours a week.

  4. I don’t know much about mega-developments, so maybe I’m being a bit dim here, yet the thing I have never been able to understand is why Croydon set about the compulsory purchases and the destruction of our town centre BEFORE Frank Lowy and Westfield was firmly nailed down contractually and/ or there was at least a planning application approved for it?

    • derekthrower says:

      That’s the wonder of Jo Negrini’s expertise wasn’t it, backed up by the hopeless political leadership that could not contemplate the high risks they were being exposed to.. The project was dead after Brexit and the long term uncertainty created. Any credible analysis would have at least paused all ongoing projects and have reassessed the situation before such losses accumulated to place the Council in a position where it was far too deep into it all and so could not face pulling out. Anyone remember Negrini’s mythical Plan B?

    • Ian Kierens says:

      You have to ask where those compulsory purchases were controlled from and who now owns that property.
      Compulsory purchasing powers are required to provide needed development of a Community.
      However if they are used badly, or corruptly, or just abused by those employed at the Council, to benefit or incentivise private companies to the detriment of that community – that is when those powers are brought into disrepute by a bad employed administration and the reputations of elected officers also.

      Local Government – especially in Croydon needs a good house clean and Councillors need to understand they are a control on the administration not in their pockets and vice versa.

  5. John Kohl says:

    Presumably the Whitgift Foundation that owns the freehold on which the Whitgift Centre stands must be very concerned. I assume if there are fewer and fewer retail tenants paying rents it diminishes the funds they have that can be put to charitable purposes.

    Before I ever lived in Croydon, I’d come here to shop. It was always about a great shopping experience with premium retail experiences, like Allders.

    The internet is just as much to blame for what has happened of course. I’m astonished when young people tell me they buy clothing online now. Something I would never do.

    Internet shopping has changed everything.

    I’d still like to see a decent retail shopping and restaurant proposition in Croydon town centre, rather than even more flats (who is buying these flats anyway?).

    The Council ought to consider seriously making parking in Croydon town centre extremely low cost or free for a considerable period of time (2/3 hours). Valley Park retail park seems to be very vibrant at weekends, I’m sure in no small part because parking is free.

    • Lewis White says:

      I heard a prog on the radio yesterday — about M and S, and its programme of closing a very large number of town centre branches, but setting up new ones on the edges of town . Just like the USA. Malls on the edge of town, where people drive. Like valley park, like the Colonades.

      With free parking. But is it really living?. Chain outlet restaurants are identical across the UK. Get to a major road junction in the Midlands, Kent, North East , where ever– Pizza Hut, TGI Fridays, Burger King, Starbucks, etc etc.are there, along with a petrol station and a drive in pet food store.

      And the local towns are sadly, dying.

      A supremely ugly, badly designed, recent UK example is Westwood Cross in Thanet–betwen Margate Ramsgate and Manston (closed) airport. No masterplan, poorly routed roads, banal-itecture and non existent landscape. A yawn of a boring “non-place”.
      It is amazing that well-paid designers and planners designed something so absolutely bad..

      If Purley Way is going to become a modern mix of flats and shops (hopefully–if it ever happens, a lot better than Westwood), what will happen to the Town centre? Well, for a while, Purley Way’s big warehouse shops seemed to co-exist with the last years of Allders, Grants etc.

      Now, almost all the nice things have vanished.

      Croydon, the Polo town– with a hole in the middle ?
      Like so many others, UK wide.
      So deeply sad.

      There are no glib solutions.
      No quick or cheap fixes.

      Will the people who are coming to live in the tower blocks actually shop in Croydon, or– as the other reader comments mention above and below–will the flats be Air B & B, or Student accommodation for Chinese students?

      If they stand empty for months a year, it will do nothing for town centre prosperity.

      Maybe the solution is to let Hong Kong people to come here to live by their thousands?

      It might be the saving of Surrey Street Market.
      And at least there, will be some decent restaurants in the town centre.

  6. Ian Kierans says:

    Maybe it is time to end the property misery – But not by selling!
    Clearly foreign investment is cautious at best and more like on existent from Europe and even America.
    Is it possible to compulsory purchase the vacant lots? Perhaps with the Whitgift Foundation support and Government capital investment there are opportunities to deal with multiple problems in a one go.

    Croydon needs homes, schools, doctors and a growth community with a decent central amenity and shopping area. We still have the Fairfield but perhaps need to upscale what goes on there and utilise it better, whilst supporting emerging talent including at the college and in the community.
    But like all nice things it needs to be paid for.
    The idea of mixed use is ideal for development as a mega hub with an on site infants thru to college facility of at least 3 forms. A very large multi use gym and indoor games area and a shuttle bus available to the Colonnades playing fields.
    Apartments above the lot to house at least 1500 with a move of Ederidge road (or integrate) Boutique shops and two separate food courts. How about selling tasty nutritious meals and not burgers or chemical chicken. So stew, curry, chilli, hot pot veg/and meat to take away for a fiver or less with a piece of fruit.
    Yes forget about affordable housing for a bit. (Sacre Bleu) Not there as we want to make money. Then ring fence a proportion of that money to develop social housing in a trust for emergency accommodation for those homeless within Croydon by buying vacant buildings to enable temporary accommodation for 6 months whilst government central and local can meet their need or the private market.

    With a vibrant youth markets and soundproofed venues for music and some dancing venues for more those that like maybe ballroom or Salsa and Zouk ( South American dance is really good to keep mobile) Some reggae and calypso and a decent Mela Site back in the park with sufi music and bring to Croydon some Qawwali also. Have K-pop, Drum and Bass and a place for emerging artists to showcase their talents. (definite auditions though – I have sat thru some brilliant and some painful renditions)

    I am wondering if some musical genius might like to see how Qawwali Sufi and Gregorian can fuse with Bangra beat dubbed and see if that takes off –

    Perhaps Mr Sunak can make Croydon like the Docklands a development and business enterprise area and create a truly British multi cultural center for Education, Business, Arts, Smart Tech research, Living, Socialising AND local administration.

    There are so many ways of exploring funding options including with differing communities abroad like the Orient, Asia, The Carribean, Latin America and Africa, and setting up centers if they wish to fund or match fund along with tariff free imports (quota controlled for sale within the development area).

    There are so many differing cultures living here it is such an opportunity to invite their countries to develop business,cultural and educational links and for us as a community and a nation to export back.
    Why waste it and sit here moaning in the 30s about how rubbish everything still is?
    ps there are a lot more people from a lot more backgrounds in the Borough and should be included please feel free to add and embrace —

    • John Kohl says:

      Unfortunately, UK plc has become an economic basketcase since 23 June 2016. No sensible foreign investor – anywhere in the world -, who is property advised, would choose voluntarily to invest here given the political uncertainty, and especially now the UK is no longer a gateway to trading into the EU.

      At the moment our current government is hardly projecting that foreigners are welcome, which doesn’t help.

      Until a UK government of some stripe (but probably not the Tories) sort out precisely what UK plc’s place in the world is, foreign investment will continue to decline.

      • Ian Kierens says:

        Not strictly accurate. Croydon in particular is receiving quite substantial investment and has been for some time.
        Regretfully this is mostly within the technology sector and property.
        Quite a lot of property is being marketed in foreign markets China and the Indian sub continent in particular. The same is happening with technology and utilities.
        Foreign states are trying to get a foothold across the sector to build plants and manufacturing. Not so much to supply us but to obtain cutting edge technology and feed their own factories along with supplying us.
        A number of estate agents in Croydon have had online open days focused on those markets especially new build flats in the center of Croydon.

        Many new properties are bought as investments to stabilise their own assets in China which is struggling and also India Pakistan and the middle east. Frankly the collapse of the pound has made the real price of buying in Britain 15% cheaper (thanks to Truss) using foreign currency as they know that it will climb again. Some will then sell as they only bought to in effect currency speculate. But many will retain those properties develop them for the rental market or receive (inflated?) rents from Councils due to the social demand for housing. Others will keep them for family to visit or stay whilst studying at the new South Bank campus and Croydon College as it works out cheaper for them as a community.

        Overall it has a detrimental impact on both sectors for GB. For Croydon it keeps the private rental market inflated on taxpayers money. It also in the middle term leaves companies who have invested time and money in their products and research without competitive advantage a few years down the line.

        Sunak is right when he states education is the silver bullet – but we do need to protect our intellectual and physical property.

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