Australian developer Westfield's exclusive talks to turn a south London shopping centre into a third mega-mall in the city hit a hurdle when a key stakeholder said the process of selecting a development partner was still underway.
Earlier on Thursday, Westfield, developer of the blue-chip Stratford City mall in east London and the Westfield London mall in the west of the capital, said it was in talks with UK charity Whitgift Foundation to explore the possible redevelopment of Croydon's 1.2 million sq ft Whitgift mall.
Whitgift Foundation owns the mall's freehold. The leasehold is owned by companies including Irish Bank Resolution Corp. (IBRC), formerly Anglo Irish bank, and Royal London Asset Management. Media reports have said Westfield could also be in talks to buy a 50 percent stake in the leasehold.
Our arrangement with Whitgift is designed to allow us now to work with all the parties concerned that have got an interest in there to try and bring forward the major development scheme, Westfield's John Burton, who oversaw the Stratford City mall project adjacent to the 2012 Olympic Games venue, said earlier on Thursday.
In terms of commenting on the individual stakeholders and how they'll be affected and how we'll work with them (it) is clearly a little bit early, Burton told Reuters.
Royal London said later on Thursday it was surprised to learn of the talks between Westfield and the Whitgift Foundation.
This has taken place without prior consultation with Royal London or, to our knowledge, the Whitgift Trust, whose ownerships jointly amount to approximately 75 percent of the centre and include the management responsibility, it said.
Royal London also said it was keen to progress the development of Whitgift, and was continuing the process of identifying the most appropriate partner to move the development forward.
Whilst we at Royal London are admirers of Westfield's London developments, we are aware of several other major shopping centre developers similarly capable of delivering an excellent scheme in Croydon, Royal London said.
Burton was not immediately available to comment on Royal London's statement. The Whitgift Foundation and IBRC declined to comment.
Westfield said Croydon was a strategic location that could attract more than 3 million customers in an area that was under-served by high quality retail and leisure facilities.
In February, IBRC appointed Jones Lang LaSalle to sell part of its 50 percent leasehold share to a development partner. The bank bought its stake in partnership with Howard Holdings in 2005 for 220 million pounds.
If it goes ahead, the Whitgift project will likely provide a boost to the UK's anaemic mall pipeline, which, since the financial crisis, has been hurt by project delays and a slowdown in construction activity.
(Reporting by Brenda Goh; Editing by Andrew Macdonald)