London | It takes only 15 minutes to make the 18-kilometre train journey from central London to the southern suburb of Croydon, but it feels like a town apart.
It has three train stations and its own tram network, and its retail centre looks more like a provincial market town than a suburban London high street. Fancy apartment towers have been springing onto the Croydon skyline, but many have the same lack of care for the local landscape and atmosphere that seems to blight the whole town.
The town is scarred by a desolate four-lane underpass, a classic brutalist road project from the 1960s. Sandwiched between that and a down-at-heel pedestrianised shopping street is a collection of tatty office towers and a shopping mall that time forgot.
On a Friday at lunchtime, foot traffic is thin and many of the mall’s shops are vacant. There’s more activity just outside, at a spontaneous street memorial where people stop to contemplate the hundreds of floral bouquets and messages laid at the site of a particularly senseless teenage stabbing.
This bleak 10-hectare collection of unloved city blocks is now in the sole hands of Paris-headquartered, ASX-listed shopping centre giant Unibail-Rodamco-Westfield. In April, URW bought out its joint venture partner Hammerson after a decade of inaction.
Croydon urgently needs a redevelopment that breathes life and colour into this dour site, and URW is now beavering away at a masterplan that is likely to be submitted in 2025.
The site is pretty much a tabula rasa. This means this development has the potential to be the post-pandemic paradigm, or paragon, of what a Westfield mall should look like in the mid-21st century. And it won’t look like what has gone before.
“The way we are looking at Croydon is definitely totally different from the way we were looking at it when Westfield was looking at it maybe 10 years ago when they engaged on that project,” URW chief executive Jean-Marie Tritant tells The Australian Financial Review.
“The vision has changed, because the world has changed, what the people want has changed, the behaviours have changed. And we need to take this into account.”
The Croydon project will underline URW’s evolution from a company that builds and operates shopping centres into one that, much like, say, Lendlease, regenerates large tracts of brownfields urban land into a mix of retail, office, recreational and residential.
Tritant describes building a shopping mall as “creating the infrastructure of life”, around which other types of development can naturally mushroom.
URW’s new chief strategy and investment officer, Vincent Rouget, fleshes out this vision. He says that because shopping centres are now “destinations” rather than just agglomerations of shops – there are restaurants, leisure activities, health services and so on – they can lay the foundation for a community.
“For me, [a mall] simply brings life to a place. And so this is why I often say that destination retail is really the key ingredient to make a place lively, a place that works. And then you can build around it many other uses, many other services beyond retail and commerce,” he says.
“That doesn’t work the other way around. You can be an amazing office property developer, you can decide to build the best office tower ever. But if it’s in the wrong place, you’ll never get any retail, and any life around it.
“So I do feel that mastering this destination-retail capability is really an enabler to go wider, into the mixed-use approach.”
London, where URW already has two huge malls to the east and west – in Stratford White City, respectively – seems to be the company’s Petrie dish for this new strategy.
The Stratford Westfield has a new 1225-apartment, £670 million ($1.28 billion) build-to-rent residential scheme called Coppermaker Square, which will be finished next year. Meanwhile, there is a plan to develop 1700 homes at White City.
One difference, as Rouget points out, is that URW is not a typical property developer – one that gets the product built, sells it, then moves on to the next project. In Stratford, URW retains a 25 per cent stake in Coppermaker Square. Although it has a contractor for the day-to-day management of the residential properties, the company remains involved in the asset.
“It’s adjacent to, or it’s on, our shopping centre. … You need to make sure that the level of service, the level of quality is there,” he says.
“So we want to also control the footprint, it’s an important part of the experience. And so we will retain management capabilities on that front. That’s an interesting way forward.”
A similar project is underway in Hamburg, where URW will build 579 riverside flats as part of its €1.3 billion ($2.17 billion) Uberseequartier mall-and-office redevelopment in the German city’s port district.
The shift to a more mixed-use model won’t happen only on new sites, though. Rouget says it’s possible to densify and diversify at many of its 75 shopping centres, just as it is doing in Stratford and White City.
‘The existential question is over’
During the COVID-19 pandemic, when footfall at malls collapsed and was slow to recover, URW’s shift to residential and office looked like a defensive move – a hedge against a future when people might abandon the mall for online or local retail. But Tritant adamantly rejects this.
He says consumer traffic at malls is back to pre-pandemic levels and growing. If retailers are slimming down their bricks-and-mortar, Westfield tenancies are among the outlets they tend to keep.
“The existential question around physical retail is over. Everyone understands and accepts the fact that physical retail is core, is here to stay, and somehow it’s even part of the success of the brands – because you need to be omnichannel, you need to be offline and online,” he says.
“If you try to be only digital, it doesn’t work; all the digital brands at some point are coming to develop stores. You will see the value of the good retail destination centres being recognised by investors as being a very interesting investment.”
Residents of Croydon, then, can probably expect a development including not just a mall but thousands of residential apartments as well. The trick, says Rouget, will be finding a balance between them.
“It’s really finding the right sizing for retail that makes it large enough so that it’s a magnet, and it pulls in people and traffic and liveliness, without overdoing it. And it’s really about building the city around that,” he says.
“We increased our optionality by buying out our partner [Hammerson]. And now we are initiating this [masterplan] process. But it’s a very long-term process to find the right path.”
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