Analysis: What lessons can be learned from the Westfield Croydon debacle?

Then London mayor Boris Johnson said the redevelopment would “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.” 

The goals of the redevelopment at the outset were lofty. The scheme was initially intended to be around 200,000 sq ft and would include retail, leisure and residential offerings with the potential for hotels and office space as well. This was part of a wider, 1.5 million sq ft redevelopment of the surrounding area. At the outset, the partnership insisted that the redevelopment would create over 5,000 new jobs.

Eight years later, and without a spade in the ground, the planning permission to redevelop the existing Whitgift and Centrale shopping centres expired. Croydon council is left with a £310m business rates blackhole and the local community left with a shopping centre complex that hasn’t seen any investment in a decade as it had been marked for redevelopment. 

Why did the Westfield Croydon scheme ultimately fail? And what lessons can be learned from its demise? 

A strained relationship

Rumours have abounded for a number of years that the Croydon Partnership between Unibail-Radamco-Westfield (URW) and Hammerson was built on shaky foundations. In 2019, the partnership announced a review into the centre with an eye to reducing the available retail space in favour of more offices and a hotel. The following year, URW quietly removed the Croydon centre from its pipeline of future projects. 

In 2019, Retail Week visited the Whitgift, and found a shopping centre full of shuttered or abandoned units, devoid of foot traffic and a growing sense of unease amongst the retail occupiers who remained that the situation was becoming increasingly untenable. 

The dilapidated state of both the Whitgift and Centrale had a hugely negative effect on footfall. Springboard data at the time showed footfall around the centres and nearby North End was down 16% compared to the wider area. By comparison footfall on the high street, 500 yards away, had grown 7% year-on-year.

Boxpark founder and chief executive Roger Wade believes the Croydon Partnership was an ill-fated development from the start.

“Fundamentally, I don’t think the partnership between Westfield and Hammerson was the best-conceived joint venture. Effectively it was asking two major retail development companies who are rivals to work together.”

The pandemic has only further driven a wedge between the two. While URW has not escaped completely unscathed from the pandemic, it finds itself in a far stronger financial position than Hammerson. 

Hammerson was one of the retail property firms most severely affected by the pandemic, reporting a £1.1bn loss in the 2020 financial year and putting huge swathes of its portfolio up for sale. 

While the partnership may have grown apart Chris Geaves, chief executive of property development firm Sovereign Centros believes another reason for the failure of the Croydon scheme is the demise of the traditional, retail-led shopping centre. 

“The fundamentals for the original development were sound. Croydon needed a modern contemporary shopping centre of scale with strong anchors with a regional draw and good connectivity in an area of expanding population,” says Geaves.

“The problem today however is that 1.5 million sq ft of new space in 250-300 unit shops with two department stores is neither sustainable nor implementable.” 

It’s a verdict reached as well by Croydon council. In a report published on Monday (16 August), the council tried to find a bright side to the collapse of the project, saying: “Croydon, on the one hand, is fortunate that the 2018 development did not proceed; opening post-pandemic with an outdated operating model. But the Whitgift Centre now is very tired and requires a fresh approach away from a traditional model dominated by retail and anchored by department stores.”

Too many cooks

For Wade, one of the main lessons from the collapse of the partnership is that high street or shopping centre redevelopment schemes require a singular vision in order to be successful. 

“Going forward I can see no other way for a redevelopment to work without a single developer leading it. Otherwise you get conflicts and a difference of opinion”. 

Wade also believes any future shopping centre redevelopment needs to be more heavily mixed-use.

“I’m not sure any scheme can stack up purely on retail, there’s going to have to be a higher proportion of residential and commercial offices,” he says. 

Wade has reason to be confident in Croydon’s retail prospects, despite the longwinded Whitgift Centre debacle. He says Boxpark has “enjoyed a fantastic five years” in Croydon since opening in 2016, and says the branch has now overtaken Shoreditch to be the group’s “best performing site”.

On the redevelopment site specifically, Wade says he is in discussions with a “major property fund” about the possibilities of putting together a consortium to take the lead on redeveloping the town. 

“I think it’d be a crying shame if it isn’t redeveloped and if other people don’t step up - we will be looking to step up and put a consortium together to redevelop the scheme”. 

Think small, look local

Like many other town centres across the UK, experts also say that Croydon should look at smaller retailers and local entrepreneurs to fill voids on high streets and in local shopping centres. 

Speaking to Retail Week in May, Croydon BID chief executive Matthew Sims was still hopeful of movement on the Westfield scheme but seemed to see the writing on the wall. He said the area had to look at other retail offerings to progress. 

“Croydon cannot afford to stand still. It needs to consider how it works with inward investment and attracting a new offer. While a number of larger retail chains have gone to the wall [during the pandemic], we’re seeing other retail organisations considering expansion or taking advantage of the opportunities with the high street. That’s what Croydon needs to focus on.”

In its report, Croydon council outlined some new developments including a textile repairs café in the Whitgift Centre and a possible tech office hub in the Centrale shopping centre. 

Repurpose, not redevelop

For Sovereign Centros’ Geaves, the main lesson from the Croydon debacle and other town centre regeneration schemes is that repurposing may not always be the right move. 

He believes that the footfall recovery since the lifting of coronavirus restrictions shows that people still want to shop in stores, both to spend money and socialise with one another. Rather than tearing down existing space at great expense, landlords and councils alike could look at more judicious use of existing sites to better serve changing customer behaviours. 

“I suspect that Croydon’s future will be much more about repositioning and repurposing rather than redevelopment,” he says. “The existing dominant out of town and city centre’s will thrive and prosper if they can satisfy the requirements of their key tenants and recognise that these locations need to offer a mix of different uses.”

The collapse of the Croydon Partnership is a fresh blow to a town and a community in desperate need of fresh investment. While there are lessons to be learned more broadly for retailers and landlords alike, without fresh leadership and new ideas, the scheme and the town are in danger of becoming a retail cautionary tale.