Westfield owner dumps plans for big London mall
Unibail-Rodamco-Westfield will now work on a new masterplan for Croydon town centre. Photo: Supplied

Westfield owner dumps plans for big London mall

London | Unibail-Rodamco-Westfield has gone back to square one in its seven-year project to redevelop a dilapidated south London shopping mall into a third flagship Westfield centre, yanking the project from its pipeline and refocusing it away from retail.

URW and its partner, British mall developer Hammerson, have responded to changing and challenging market conditions by scaling back their ambitions for the long-delayed mall in Croydon, a suburb about 15 kilometres south of central London.

“The old model of dropping an old air-hangar-style retail centre in Croydon doesn’t work, it doesn’t work anywhere in the planet,” Croydon Council leader Tony Newman told councillors this week.

URW and Hammerson said they’d work on a new masterplan for Croydon town centre, based on a development that would use more of the existing buildings and be less retail-centric.

“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,” the two companies said in a statement this week.

They envisaged “a more sustainable development, phased over time, which includes the refurbishment of some existing buildings”.

A Hammerson spokesman told local media Croydon had “potential for mixed-use development” and the partners were “focused on right-sizing the retail”.

URW has removed the Croydon project – which would have been the third London Westfield mall, joining its high profile sites in Shepherd’s Bush to the west and Stratford to the east – from its development pipeline. The scheme has been underway since 2013 and got development approval in 2017, but was put into an initial review last year.

The suspension of Croydon was part of a €3.2 billion ($5.4 billion) cull, revealed in its profit result in mid-February, which pared the pipeline back to €8.3 billion.

URW stripped out projects that “require major redefinition, are significantly postponed due to market or administrative circumstances, or no longer meet the group’s return requirements”.

Croydon Conservatives – the opposition bloc on the council – called the move “a disaster for the town” on Twitter, and pushed it onto the agenda at a council meeting this week.

“There has been delay after delay, and the recent removal of it from the development pipeline has sent shockwaves through the town,” Councillor Jason Perry told the meeting on Tuesday.

But the Labour council leader Mr Newman said they would salvage a more realistic scheme from the embers.

“The crash in retail has caught up with the reality – that the scheme is now about seven or eight years out of date,” he said.

“Perhaps it is just possible that somewhere in all of that, Croydon has dodged a bullet and we get a mix of leisure, retail and housing that is a sustainable scheme for Croydon.”

Britain has the highest online shopping penetration rate in Europe, with 93 per cent of consumers expected to be doing at least some purchasing online by 2021. About one-fifth of retail sales now take place online, almost double the percentage when Westfield first became involved in the Croydon project.

URW has a high vacancy rate of 7.7 per cent in its British assets, and like-for-like income dropped 4.2 per cent in 2019.

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