Westfield owner URW to buy Hammerson out of Croydon JV

Unibail-Rodamco-Westfield, Europe’s biggest property owner, is boosting its presence in the UK. The French company is reportedly in talks to buy Hammerson out of the £1.4 billion regeneration of Croydon town centre in south London.

A CGI of the new Whitgift Centre in Croydon

Unibail-Rodamco-Westfield (URW), which owns London’s two Westfield shopping malls, would take control of the redevelopment of the centre of Croydon and buy out Hammerson, its 50:50 joint venture partner for the last ten years. The two companies declined to comment on media reports.

The plan agreed in 2013 had been for the two partners to combine their existing separate interests in Croydon’s two main shopping centres: Hammerson’s Centrale and URW’s Whitgift Centre, where the French group is development partner to the Whitgift Foundation, a local charity.

The partners would then cooperate to build a new major retail destination for the city, a £1.4 billion regeneration plan that received planning approval in 2014 but has since seen many changes as the outlook for the retail sector worsened. Last year plans for a hotel and offices were added.

The sale of the 50% stake , if confirmed, would make URW sole owner of the Whitgift Centre project.

The retail real estate investment trust Hammerson, badly hit by two decades of decline in the retail sector and the impact of Brexit and the Covid pandemic, said it planned to reach its £500 million disposal target this year.

In 2022 Hammerson sold assets for £195 million, including Leeds Victoria Gate and Victoria Quarter shopping centres in Leeds for £120 million and its 50% share of Silverburn in Glasgow for £70.

Lighthouse, Hammerson’s largest shareholder, has been asking the company to cut its exposure to development projects and to resume paying shareholder dividends. It also wants Hammerson to sell its stake in Value Retail, which operates the Bicester Village flagship retail destination.

However, other shareholders and institutional investors including Schroders and Legal & General Investment Management have been more supportive of Hammerson’s strategy.