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South London standstill: what next for Westfield Croydon?

Croydon town centre’s revamp has been blighted by delays for years. But as developers blame Brexit, could the real challenge lie in reimagining retail for 2020 shoppers?

News that the long-awaited £1.4bn Westfield shopping centre in Croydon, south London, had once again been delayed sparked frustration and surprise in the town last week. Business owners were bereft and local politicians took to Twitter to squabble over the blame.

It follows years of delays surrounding the development, the last time only months previously when a September 2019 start date on building work was pushed back to 2020.

The joint developers – Hammerson and Unibail-Rodamco-Westfield (URW) – initially announced plans redevelop the Whitgift Centre shopping mall and other ageing retail units in the town centre in 2012 under the name Croydon Partnership. It was hoped it would “ensure Croydon’s future as the retail and leisure capital for south London”.

But now, the scheme is one of €3.2bn (£2.66bn) worth of projects removed from the developers’ pipeline because they “require major definition … due to market or administrative circumstances or no longer meet the group’s return requirements”.

This lack of clarity means larger retailers are reluctant to come in

Yunus Kidia, local retailer Vibe

The latest postponement came as a surprise for some. Units temporarily housed in the former Allders department store building had been moved into the Whitgift Centre in late 2019, a decision taken by some as a sign of movement on the project.

“I’d presumed that’s why they’d moved everyone on,” says Yunus Kidia, owner of women’s clothing store Vibe, which is in the Whitgift Centre. “This lack of clarity with what is happening means larger retailers are reluctant to come in. Retailers need to know what sort of environment they’ll be operating in and at this moment in time there is no environment.”

“Small businesses are suffering,” adds Bakhtawar Budwal, owner of family-run designer clothing independent Budwals, which is in the nearby Centrale shopping centre. “I’ve been trading here since 1980 and we don’t know what to do at the moment. Croydon needs help.”

Croydon’s Conservative councillors took to Twitter to call it a “disaster” for the town.

That these sentiments are echoed across residents and local authorities alike makes the perpetual delays all the more perplexing. So, what is causing the delays, and is the development still likely to go ahead?

Croydon partnership scheme hero shot cmyk

The proposed layout

Challenging times

On the one hand, it seems clear that Brexit and the wider economic uncertainties it has created are at play. In March 2019, Croydon council leader Tony Newman shared a letter written by chief executive of URW, Christophe Cuvillier, in which he warned of the “significant challenges as regards the UK economy and the political outlook”, as European retailers were “suspending plans to expand into the UK because of uncertainty linked to Brexit”.

URW reported a 3.1% like-for-like decline in rental income at Westfield shopping centres in the UK for the six months to 30 June 2019. It blamed company voluntary arrangements and administrations among its tenants, leasing delays and non-renewals, all a result of Brexit uncertainty. Ratings agency Moody’s downgraded Hammerson’s outlook to “negative” the same month, citing a “disorderly Brexit” as a risk.

The challenge is, what is a good shopping centre in this changing climate?

Ian Scott, Tag

However, Ian Scott, shopper marketing and innovation manager at retail agency Tag, is sceptical that the delays can all be put down to Brexit: “It reminds me of the Millennium Bug, when we feared the world would end, everyone runs around panicking, and the clock ticks forward and nothing happens. It’s this fear of change. Yes, Brexit is one of these things that causes some panic but it also gives the opportunity for some to use it as an excuse.

“My feeling is if you build a great shopping centre, people will come. The challenge is, what is a good shopping centre in this changing climate?”

After all, in the eight years since plans were first drawn up for the Croydon Westfield, much has changed across the retail landscape.

“New technologies and changing consumer behaviours are rewriting the rules of retail,” says Kyle Monk, head of retail insights and analytics at the British Retail Consortium. “Consumers are increasingly looking for experiences, leisure and services to complement traditional retail, requiring retailers, property developers and local government to work together in developing schemes that cater to these changing demands.”

The viability of any UK shopping centre therefore needs to be reconsidered.

“The days of leisure and retail sites aren’t over but if they want to thrive – not just survive – they’ve got to adapt,” adds Brent Stojanovic, director at Navana Property Group. “Retail-only centres are dying and to reverse this, they need a clear, distinctive offer that will pull in footfall.

“Landlords should think like good brands and be intentional in their leasing strategies – how are they giving customers something different? This may mean that asset owners and their advisers have to work harder to find up-and-coming and independent brands and new experiential operators that are shaking up traditional leisure formats.”

Whitgift centre interior from croydon council

Source: Croydon Council

The Whitgift Centre’s current interior

Full review

All of which might take extra time. A spokesman for Croydon Partnership has confirmed that a “comprehensive review” will include a rethink about how to make best use of the space: “We are focused on right-sizing the retail and introducing additional uses, including a hotel and offices, alongside residential, and are looking at opportunities to reuse some of the existing buildings to ensure a more sustainable development.”

Further insight on what that review might include was hinted at in 2018, when URW set out its vision for retail and leisure destinations for the next decade. The “Destination 2028” concept emphasised a shift away from traditional retail, as fewer stores are complemented by more experiential, leisure and wellness-focused facilities, such as mindfulness workshops, allotments and waterways.

Integrating this may lead to changes in the plans for Croydon, which originally included a mix of 300 shops, restaurants and cafes.

“Finding the right balance of retail and leisure uses is an ongoing challenge for all commercial property owners,” adds Stojanovic. “Entertainment is a critical part of the mix, helping to create daytime through to night-time use and giving real differentiation.”

We remain committed to delivering the Whitgift Centre redevelopment as soon as possible

Croydon Council spokeswoman

Whether this new delay simply gives developers time to thrash out these sorts of details, or longer-term uncertainty for the project remains unclear. Croydon Partnership insists it “remains confident in Croydon as a destination and in its potential for mixed-use development.”

Proposed anchor stores Marks & Spencer and John Lewis both say they remain interested, too, despite ongoing delays. A spokeswoman at M&S says the department store “continues to have an interest in bringing a new store to the Croydon area” but has no further updates, and John Lewis & Partners says: “We look forward to hearing the outcome of Croydon Partnership’s review and will work with them once their proposals become clearer.”

Croydon Council says it is not giving up on the project. A council spokeswoman says: “We look forward to further productive meetings with [URW] and the Greater London Assembly in the coming weeks, and we remain committed to delivering the Whitgift Centre redevelopment as soon as possible.”

Local retailers waiting for the regeneration they have been promised for years are less convinced.

“I’ve been here for almost five years, and each year they say they’ll develop, then they’re not going to develop,” says one manager at an independent store neighbouring the proposed site. “They keep delaying it and I don’t know what’s going on. It’s so frustrating for us because it will make a big difference. Now I’m beginning to question whether it will happen at all.”

 

The Drapers Verdict

Dogged by empty units and declining footfall, it is clear that Croydon could benefit hugely from the boost of a billion-pound regeneration such as that proposed by  Croydon Partnership. But Croydon’s woes are also symptomatic of the huge changes in retail that could leave developers, and their investors, nervous.

Ecommerce and the subsequent decline in UK high streets call into question the viability of any central shopping centre, and so it is not surprising that Unibail-Rodamco-Westfield and Hammerson are desperate to get this right. At the same time, perpetual delays are stirring up resentment and frustrations among local residents, retailers and councillors, and so Croydon Partnership needs to provide clarity, and soon – even if it is not the answer people are hoping for.

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