Thursday 2 September 2010

Venture Capitalists Buy Stratford Shopping Centre

Apparently Stratford Shopping centre is worth a lot more money that I would have expected - £91.55 million to be exact, the price paid by investors from the venture capitalist firm Catalyst Capital, who have bought it from its current owners Land Securities as part of a deal that includes the properties at 44 Broadway and Morgan House.

Land Securities are selling up because they need the cash, or as their head of retail investment puts it, "funds from the sale will be channelled into other activities, including more immediate development opportunities". So why buy a shopping centre in the midst of economic uncertainty? The obvious answer is its location, right opposition the new Westfield Stratford City development across the road, which will when it opens be the largest urban shopping centre in Europe. The fact that it is close to the Olympic park may also be a factor, but a secondary one.

It might seem that the last thing anyone would want is a retail centre that is about to become eclipsed by another huge shopping development. But Catalyst Capital has said that as well as a "strong tenant line up", Stratford shopping centre also has "excellent development opportunities which will allow us to utilise our asset management and development expertise". What this means is that it is seen as a prime site, one worthwhile grabbing now from another company that needs money, that has the potential for redevelopment in the future.

Nothing will change that much in the short term, but as Westfield Stratford City overwhelms the unloved and ugly old shopping centre, expect fewer new shops, even more pound shops and more short leases - and, in a few years time, even something more drastic. Capital Catalyst have bought it to make money for its investors and I wouldn't be surprised if it isn't eventually bulldozed, sold on and absorbed as an annex of an expanding Westfield.

What this will mean for low income Stratford residents is unclear - but by then, anyone poor will probably have been forced further east. In other parts of London, they call this process 'gentrification' but in Stratford, it's something different: the area's transformation into a new West Thurrock. Not for the first time, I'm glad I chose to live that liitle bit further away.

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