With development activity thin on the ground, something has to fill the void. Sadly, there is little that’s constructive replacing the lack of construction: the industry is in grumpy mood this Easter.
In Ealing, a rift between the council and Grant Thornton is threatening the sale of the £500m Arcadia development site. Administrators from the accountancy firm are picking through the wreckage of former owner Glenkerrin, and see greater value for creditors in a piecemeal sale of the properties around Ealing Broadway.
Bold pricing has driven one bidder, Sellar Property, away. Two others, Land Securities and Resolution Property, have been told to return with better offers.
None of the this will placate Ealing council, however. Understandably, it wants delivery of a single site that would spur the redevelopment of its town centre. Unsurprisingly, it is willing to consider a compulsory purchase order to secure that outcome for a scheme that has been 20 years in the making.
A little to the south-east, there is an even juicier argument brewing in Croydon.
Last November, the Whitgift Foundation, which owns the freehold of the Whitgift shopping centre, signed up to an exclusive agreement with Westfield to explore options to redevelop the mall.
At the time, that didn’t delight Royal London Asset Management and Irish Bank Resolution Corporation, which together own 75% of the Whitgift Centre’s long leasehold.
And so it wasn’t wholly unexpected that the pair this week turned to another developer, Hammerson, to carry out the management and redevelopment of the 633,400 sq ft retail site.
It was, said Hammerson, an “exciting prospect with enormous potential [that] bodes well for Croydon’s prospects”. And in what was surely a sly dig at other interested parties, the two leaseholders themselves said: “Of equal importance, Hammerson possesses the necessary resources to complete a project of this scale successfully.”
Immediately, the Foundation flexed its 400-year-old muscles, condemning the “inexplicable” appointment and complaining that it had been excluded from the process.
Westfield waited 24 hours before insisting it remained “determined to work with the owners and local authorities to help create a town centre that the people of Croydon and surrounds can be truly proud of”. And perhaps responding to Royal London Asset Management and Irish Bank Resolution Corporation’s perceived jibe, it added: “We have the skills, the funding, the resources and the track record to make this project a success.”
Both situations are undignified, distracting and, certainly, in Croydon’s case, surely avoidable.
In Ealing, the prize is a mixed-use scheme comprising 500 homes, plus 200,000 sq ft of shops, offices and leisure. Grant Thornton is obliged to deliver maximum value to creditors, so legal recourse may be the council’s only option. In Croydon, the regeneration of a once proud, but much neglected, retail centre is at stake. Successful delivery of that will play a large part in delivering on the ambitions of the council and local business groups to turn Croydon into an office hot spot that can accommodate overflow from a squeezed central London market.
One often-heard consideration bears repeating: in this climate, when it’s hard enough to get development off the ground, the only people to benefit from rows of this nature are lawyers.
“Strong PMI figures for UK services,” tweeted James Roberts, head of commercial research at Knight Frank, on Wednesday. “Time to write the obituary on the 2007 to 2011 downturn. Steady growth for office demand going forward.” It was a confident call, but one that echoed BBC business editor Robert Preston and Sunday Times economics editor David Smith, who were similarly cheered. After all, the CIPS/Markit purchasing managers index is a bellwether and the better-than-expected result – an index reading of 55.3, up from February’s 53.8 – is a strong signal that the worst may be behind us.
