Westfield Joins Hammerson in $1.6 Billion Croydon Project
Hammerson Plc (HMSO) and Westfield Group (WDC) formed a venture to rebuild part of the English town of Croydon in south London in a project valued at about 1 billion pounds ($1.6 billion), ending a tussle over the development.
Westfield, based in Sydney, bought half of the Centrale shopping center from London-based Hammerson as part of the agreement, according to a statement today. The two companies will also purchase 25 percent of the Whitgift Centre after Hammerson acquires the mall from Royal London Asset Management Ltd. They had planned to develop the project separately,
Hammerson, Britain’s third-largest real estate company by market value, was appointed in April by the leasehold owners to manage and redevelop the Croydon center. Westfield had planned a development on the same site after signing a deal in November with the Whitgift Foundation, which owns the freehold.
Today’s agreement “ends the battle for control and therefore reduces the risk of overpaying,” JPMorgan Chase & Co. analyst Harm Meijer said in a note to investors today.
Hammerson and Westfield plan to redevelop and combine the Centrale mall and the Whitgift Centre, Croydon’s biggest retail outlets, and build retail, leisure and residential properties on a 200,000 square-meter (2.15 million square-foot) site, according to the statement. Construction is expected to start in 2015.
Westfield fell 0.6 percent to A$10.93 in Sydney trading today, trimming their gain in the past 12 months to 25 percent. The benchmark S&P/ASX 200 Index climbed 13 percent in the past year. Hammerson was little changed at 483.3 pence at 8:30 a.m. in London.
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