London-listed Hammerson (LON:HMSO) Strengthens Its position In Croydon Town Centre

on Sep 18, 2012

Hammerson has bought a 25 percent stake in the leasehold of Whitgift Centre from Royal London Asset Management. The fund management company accepted Hammerson’s bid of £65 million. The deal is seen as a decisive move against the Australian mall giant Westfield (ASX:WDC) in the battle for the centre of the London borough of Croydon that has been going between the two companies for some time now. Both Hammerson and Westfield are candidates for developing the shopping centre, but a split between the site‘s owners has spurred their current rivalry.

The leasehold generates a gross annual income of £3.3m and net income of £2.2m. 50 percent of it is owned by Irish Bank Resolution Corporation and the other 50 percent are split between the Whitgift Foundation and, as of yesterday, Hammerson.
The acquisition of such a considerable stake in the 155-year leasehold puts Hammerson in a good position in the struggle. However, its competitor remained calm, claiming that this won’t change its plans for Croydon.

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John Burton, Director of Development at Westfield stated that the announcement “does not change Westfield’s commitment to regenerate Croydon.”
Westfield plans are for a £1bn regeneration of the centre. According to the Australian company, this will create more than 5000 permanent jobs in Croydon. Westfield has extensive experience in developing similar projects in the UK, having developed Westfield London and Westfield Stratford City.
Hammerson (LON:HMSO)on the other hand, owns Centrale shopping centre behind the present Whitgift acquisition.
In November, 2011, Westfield had come to an agreement with Whitgift Foundation – to develop the site. However, RLAM and IBRC objected to it and the deal failed.


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