Westfield and Hammerson sign joint venture for £1bn Croydon retail development

Westfield and Hammerson intend to redevelop and combine the two shopping centres into a mixed-use scheme of around 200,000 square metres, which will include retail, leisure and new homes with the potential for hotels and offices. The scheme is expected to create over 5,000 new jobs.

Prior to the agreement, both developers had produced separate plans for the redevelopment of the Whitgift Centre and they have been involved in a dispute over who had the right to go ahead with its plans.

Under the terms of the new agreement, Westfield has acquired a 50% interest in the £115 million Centrale shopping centre from Hammerson. The joint venture will also purchase a 25% interest in the Whitgift Centre, following completion of a conditional acquisition agreement between Hammerson and Royal London Asset Management.

The new partnership will engage Westfield to undertake the design and construction of the project. Hammerson will continue to asset manage the Centrale centre and any further acquisitions prior to the development of the Whitgift Centre. A Westfield Executive will lead the project development team and it is intended that a Hammerson Executive will lead the asset management of the completed centre.

“The £1billion redevelopment joint venture with Hammerson will provide certainty for the residents, local businesses and retailers of Croydon and the region," said Westfield chairman Frank Lowy in a statement. "The delivery of a major retail regeneration scheme will re-establish Croydon as South London’s premier shopping district and will be a catalyst to further investment and development in the Croydon borough.”

“We have shown our commitment to Croydon through our existing investments in the town centre and I believe that by working together we can deliver a world class scheme for retailers and residents," said Hammerson chief executive David Atkins. "Both we and Westfield remain excited and convinced by the opportunity in Croydon, which we can now progress with clarity.”

The Mayor of London, Boris Johnson, welcomed the agreement. "It is great news that these two international developers are coming together to drive forward this vital regeneration and put Croydon at the heart of London’s future prosperity, building confidence for investors and local people in one of the capital’s most important town centres," Johnson said.

“This is great news for Croydon," said Richard Ford, planning expert at Pinsent Masons, the law firm behind Out-law.com, who has been working on the scheme for Croydon Council. "The redevelopment of the Whitgift Centre is a key part of the Croydon Town Centre OAPF adopted this week by the GLA, and the Council has clearly been working towards resolving the impasse for some time. Hopefully progress can now be made swiftly and the enhanced scheme progress with the support of all stakeholders,” Ford said.

The joint venture partners said they will meet with all stakeholders over the coming weeks to discuss their plans, following which a revised masterplan will be created combining the best elements of both schemes. It is anticipated that planning consent could be secured in 2013, with construction expected to start on site in 2015.