Retail giants battle over Croydon site
Developers line up to take on Whitgift Centre
Sunday 13 November 2011
Croydon is set to become a battle ground for two retail developer titans as Hammerson vies with Westfield to be the developer of a giant shopping scheme in the town.
The FTSE 100-listed Hammerson has emerged as a contender in discussions with the charity that part-owns the Whitgift shopping centre in Croydon. The news follows last week's announcement from the Australian shopping centre giant Westfield, of its exclusive arrangement with the Whitgift Foundation – the freeholder of Whitgift shopping centre – to look at development options for the centre.
The ownership of the 1.2m sq ft Whitgift centre is complex. Irish Bank Resolution, formerly the Anglo Irish bank, and Royal London Asset Management own the long leasehold of the centre.
Irish Bank is seeking to work out a more simple ownership structure for an eventual sale. It hired the property agent Jones Lang LaSalle to advise on the structure of a sale. Following Westfield's announcement, Royal London said: "We are aware of several other major shopping centre developers similarly capable of delivering an excellent scheme in Croydon. We are continuing the process of identifying the most appropriate partner."
Hammerson, which has long-term plans for giant retail schemes in Brent Cross, in north London, and in Leeds and Sheffield, and Westfield are not the only property companies to be in the running for the development. The specialist developer Capital Shopping Centres has expressed interest, while the listed property company British Land, and the Australian developer Lend Lease are also in talks, along with Meyer Bergman and Area.
André James, an investment agent at Colliers, said: "The Whitgift Centre is a complex legal and physical structure. The three ownerships have evolved from the original Whitgift joint venture in the 1970s."
Hammerson, whose share price stood at 399.8p on Friday, went on a buying spree at the start of the year scooping up a £400m portfolio from Kuwaiti property company St Martins. The haul included the Centrale shopping centre in Croydon. It is keen to be involved in any new development in Croydon as it would not want Centrale to be overshadowed.
One expert said: "Westfield has the expertise and the balance sheet, and with the success of their two centres in the east and west of London they would be good for Croydon. They have proved they can deal with complex land ownership rights and get a scheme developed."
Riot-scarred Croydon has been waiting for a new retail heart for decades. The property company Minerva had a scheme called Park Place but after a series of problems Delancey took control of Minerva this year and it now owns the large site in the town which houses department store Allders of Croydon.
But, the town is not devoid of new retailers and Whitgift has been attracting tenants with the help of the asset manager Vale Retail, such as New Look and Superdry, which will open soon.
Anglo Irish became part owner of the Whitgift when it took control of the Irish borrower Howard Holdings. The value of the shopping centre has declined from £500m at its peak four years ago to around £350m today. Anglo Irish is keen to re-coup its debts.
The ownership of the Whitgift Foundation dates back to Tudor times. The existing shopping centre was part of a development built by Ravenseft in the 1960s.
The shopping centre has two towers of offices above that are let to the Home Office and will become vacant next year.
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