What will the Westfield shopping centre do for Croydon’s property market?
Six months ago, Croydon Council gave the green light to a £1.4 billion Westfield shopping complex to replace the increasingly shabby Whitgift centre in the heart of the town, saying it would be the catalyst for a mini-boom in the area.
Although the announcement set pulses racing over the prospects of a luxury retail hub like London’s two other Westfield centres in Shepherd’s Bush and Stratford, particularly after London mayor Sadiq Khan gave the project his blessing, it has since transpired that work won’t start until 2019 and is now scheduled to open in 2022.
But despite this delay – which has been blamed on the complexities of moving so many businesses – the project is expected to give Croydon a huge economic uplift and transform many of its central streets.
It’s much more than just a shopping centre, as the plans currently stand. The partnership developing the project says it will bring 6,000 new jobs to Croydon, and that the complex will include 1,000 homes within its five residential towers, a fifth of which will be affordable rented properties.
The argument put forward by Westfield for the development is mainly that although Croydon has a large and increasingly affluent population, most locals go elsewhere to shop. And a walk through the Whitgift shopping centre reveals why – it’s cut off from the rest of the town, is run-down in places and has many empty units.
But while all this is laudable, what landlords in Croydon will like most about Westfield is the likely transformative effect it will have on the local property market. This is already proven in Shepherd’s Bush where, just three years after its Westfield opened in 2008, the impact was said to have been ‘explosive’.
Figures from Rightmove for 2008 show that house prices in White City and Shepherd’s Bush, which the West London Westfield straddles, increased by 12.79% after it opened compared to a London average of 3.1%.
But Westfield cannot claim all the glory. Croydon is an interesting property market for landlords for other reasons. Prices for buy-to-let staple two-bedroom apartments are £200,000 or 40% cheaper on average than neighbouring Lambeth, while the rent gap can be much less – up to 25% lower. This offers the ideal low-capital expenditure, but good rental returns many landlords are after.