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Centrale’s owners set to sell-up to Westfield in cut-price deal

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Our vacated shopping centre correspondent, MT WALLETTE, on the latest multi-million-pound boardroom manoeuvres over Croydon’s developer-blighted North End

For sale: Centrale could be off-loaded to Westfield

It has taken more than a decade, but Westfield’s hostile takeover of the Centrale shopping mall in Croydon town centre looks as if it is finally going to happen.

But the sale of Centrale by owners Hammerson to their erstwhile Croydon “partners”, now known as Unibail-Rodamco-Westfield, “would terminate decade-long plans” for the town centre’s redevelopment, according to one trade publication.

It is 10 years since Boris Johnson, when Mayor of London, together with his Tory mate, Gavin Barwell, inflicted the shotgun marriage of “Hammersfield” on Croydon, through a forced joint venture between Hammerson and Westfield, the Whitgift Centre landowners’ preferred developers.

Inevitably, like rats in a sack, the property speculators have ended up eating one another.

After two decades of decline in the retail sector and the double hammer blow of Brexit and covid, it is now a case of one struggling mall operator selling out to a slightly less struggling mall developer.

Fifteen years ago, Hammerson, then considered a successful operator of Birmingham’s Bull Ring and the Brent Cross centre in north London as well as Croydon’s Centrale, had a share price of 1600p. But Hammerson has been hit harder than most. This morning, the company was reckoned to be worth 26p per share.

Hammerson has to sell Centrale.

No more: the Croydon ‘Partnership’ was always an uneasy relationship

Property trade website CoStar News reported last night that Unibail-Rodamco-Westfield – the Paris-based company that gobbled up Westfield – “is in talks to take control of the redevelopment of the centre of Croydon in a move that would see it buy out long-term 50-50 joint venture partner Hammerson”.

CoStar reported: “The sale would terminate decade-long plans for the partners to combine their separate interests in Croydon’s two main shopping centres – Centrale in Hammerson’s case and the Whitgift Centre, where URW is development partner for the Whitgift Foundation – to build out what would be London’s last major retail destination.”

As well as the inordinate delays, the £1.4billion scheme which was originally supposed to be completed by 2017 has now had two planning applications approved by a pliant council (the chair of the planning committee had the undeclared interest of being a director of architects who had worked for Westfield), and a public inquiry, as well as a hugely expensive Compulsory Purchase Order.

But not a single brick has been laid, as tenant after tenant has quit Croydon’s town centre malls, exasperated with the Whitgift Centre’s leaking roof and constant uncertainty.

At the start of this year, Unibail-Rodamco-Westfield was hit with a £5million fine by the council for failing to action agreed elements of its scheme within a generous deadline. Croydon’s part-time Mayor, Jason Perry, has wagged his pudgy finger at Westfield, telling them he expects new plans before the end of 2023. But Westfield, and Perry, know the Mayor is powerless to force private developers into action.

Meanwhile, the Whitgift Foundation, having created the monster that is Hammersfield with its insistence on bringing in Westfield, has found the arrangement to be an albatross around its neck, with rental revenues in stubborn decline.

CoStar News reported that, “Hammerson and Unibail-Rodamco-Westfield declined to comment.” Which is a long way from a denial.

Elsewhere, Hammerson is reported to be selling up its stake in Croydon – which, remember, was at one stage a billion-pound development – for just “tens of millions of pounds”.

“If successfully concluded, the transaction will take Hammerson another step closer to meeting a £500million disposals target by the end of this year,” Sky News has reported.

“Offloading the Croydon Partnership stake to Unibail may go some way to placating Lighthouse, Hammerson’s biggest shareholder, which is demanding a resumption of dividend payments and reduce its exposure to development projects,” Sky’s City desk is reporting.

“Part of its 2021 strategy to turn around the business includes a disciplined disposals plan that would focus the group on a core portfolio of urban estates, reducing indebtedness and generating capital for redeployment into core assets.” Got that?

Even in 2019, before the covid shock to the retail sector, struggling Hammerson was selling off its assets, with £577million of property sales that year.

More recently, Hammerson has sold its Victoria Gate and Victoria Quarter shopping centres in Leeds for £120million and its half-share of Silverburn in Glasgow for £70million – none of which were included in its original disposals plan. But then, neither was Croydon’s Centrale.

As Inside Croydon reported four years ago on the business travails of Hammerson, the “recent conduct of their business does not appear to be that of a shopping mall operator who is about to stick hundreds of millions of pounds into building a new shopping mall”.


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