CoStar Interview: Whitgift Foundation 'baffled' by Hammerson selection

By Paul Norman - Tuesday, April 03, 2012 15:00

The Whitgift Foundation said today its 400-year commitment to education and elderly care in Croydon was being jeopardised by its leaseholder partners’ decision to select Hammerson to develop the town’s Whitgift shopping centre. CoStar caught up with the charitable trust for an exclusive update.

Yesterday, Royal London Asset Management and IBRC Assurance Company (formerly Anglo Irish Bank) confirmed Hammerson as their preferred partner for the management and redevelopment of the 580,000 sq ft Whitgift shopping centre in Croydon.

However, this being Croydon the announcement felt more like the first salvo in another bloody property development saga than the answer to the town’s long-running retail prayers.

Croydon-based charity the Whitgift Foundation, which owns the freehold of the centre and receives 25% of the rental income, remains committed to working with its own preferred partner Australian group Westfield.

Speaking exclusively to CoStar News today Martin Corney, clerk to the Whitgift Foundation, said the decision was “inexplicable and extremely frustrating”.

“We are baffled by the decision. For the last decade we have been encouraging stakeholders to bring forward a major scheme that is key to the regeneration of Croydon and at last when Westfield had come up with a scheme to do this we now face delay and frustration.”

The Foundation has been based in Croydon since being formed in 1596 by John Whitgift the then Archbishop of Canterbury. It provides education for the young and care for the elderly via three independent day schools and sheltered accommodation and nursing care part funded by income from its property holdings in Croydon.

Corney said RLAM and IBRC had repeatedly refused to open discussions with Westfield and the Foundation about the centre and added that they had still not responded to its approaches following yesterday’s announcement.

“What we want to avoid is the delay and hiatus there has been before in Croydon. But the leaseholders have declined to engage with us. In the end we just want to deliver what is best for Croydon.”

Westfield has no intention of walking.

Michael Gutman, managing director for Westfield Europe & New Markets, said today: “Westfield remains determined to work with the owners and local authorities to help create a town centre that the people of Croydon and surrounds can be truly proud. We have the skills, the funding, the resources and the track record to make this project a success.

"We recognise Croydon as an ideal candidate for regeneration and, through our binding agreement with the Whitgift Foundation, we are committed to taking this important project forward."

All of which means Croydon has a worrying Mexican stand-off on its hands.

The centre remains one of the most lucrative in the South of England attracting around 28m shoppers annually to stores including Marks & Spencer, River Island, Clas Ohlson, H&M, Topshop, J. Sainsbury, Mothercare and Waterstones. 

However, it is 41 years old and is in desperate need of rejuvenation.

For their part RLAM and IBRC have been vocal in their opposition to the deal Westfield struck with the Whitgift Foundation in November of last year, claiming they too were not consulted.

Advised by Jones Lang LaSalle the duo went to market seeking a development partner in December and had shortlisted Hammerson, Westfield, Grosvenor and Lend Lease.

Hammerson has already acquired the nearby Centrale shopping centre and says it is committed to the Whitgift.

Lawrence Hutchings, Hammerson’s managing director of UK Retail – a former Westfield retail director – said yesterday: “We have a vision to kick start the much-needed retail-led regeneration of Croydon and the key to that is uniting the retail core.

"Croydon is a fantastic location: the transport infrastructure is excellent, the retail opportunity is immense and through our work on Centrale, Croydon Council has a welcoming attitude to long-term, active investors. Together with RLAM and IBRCAC we plan to deliver a step change for Croydon town centre.”

None of the above statements suggest an obvious way forward, however.

Corney simply says that until all of the parties open up a dialogue there will be no progress.

“We are fully committed to our partnership with Westfield. For the last decade we have encouraged a major scheme and when Westfield approached us last year they came up with a very impressive scheme. We then took independent advice and Westfield has the right resources and expertise to bring forward a major transformational change. What excited us was the ability to bring forward a large-scale transformational scheme for the people of Croydon.”

Corney added that protracted delay on redeveloping and improving the site would have significant implications for the Foundation’s work in Croydon.

“From our perspective we rely on the income from the shopping centre to provide bursaries for children. Around 3,000 people attend the schools with 45% in receipt of bursary funding at a cost of £5m per annum. We also support 100 elderly people at our care homes. We are keen that there is no impact on this. We need to be sure we still have the resources.”

Corney pointed in particular to the ongoing need for redevelopment of the circa 280,000 sq ft of rundown offices located above the centre that were last year vacated by the UK Border Agency. A range of uses for the run-down office space have been considered including offices, residential, a data centre and a hotel.

“The loss of revenue clearly impacts us.”

Corney said the Whitgift Foundation’s commitment was to the people of Croydon. “We were a key player in the development of the shopping centre in the 1960s as it was built for the benefit of Croydon on the site of one of our schools. We have been in Croydon for 400 years and we want to be here for another 400 years.”

Vale Retail and Jones Lang LaSalle advise on the leasing for the retail at the centre. Savills and Stiles Harold Williams advise on the offices.

pnorman@costar.co.uk

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