Location Analysis of Croydon

Home , Allders, Centrale (Croydon), Park Place (Croydon), Purley Way, The Mall (Bromley), Whitgift Centre

Overview of the demographics, local economy, housing market and the retail sector Overview Location Analysis of Croydon

Central London Croydon Current and Projected Population

Croydon

▪ Croydon is a major hub for services and retail sector (8th biggest retail area in London), with North End being its main shopping street, having presence of retail stores such as Whitgift and Allders − The region has an estimated presence of c.13,000 businesses(2) ▪ Croydon Vision 2020 is a major regeneration programme by the London Borough of Croydon for Central Croydon, with an investment of over £3.5bn already ▪ committed in redeveloping the area(3)(4) Croydon has a total population of 342,800, the largest population of all the London boroughs ▪ Croydon has c.8.5m sq. ft. of commercial floor space , and a development pipeline of 8.2m sq ft, a number of which have detailed planning consent(2) − 227,300 (66.3%) of its total population is aged between 16-64 years − 189,400 (79.1%) of the total population is economically active(1), compared to 74.9% in London Type Avg. Journey Time Remarks − Services sector accounts for 91.7% of the jobs in Croydon, with Public admin, education & health being the major employers (29.9%)(1) From London Victoria. Operator is Southern Rail 16 minutes Service Railway ▪ Croydon is well connected, as evident from the table on the left, contributing largely to its economic development Bus c.50 minutes From Westminster ▪ As part of Transport for London's (TfL) £10bn Investment Programme, the East Tram 28 minutes Connects Croydon to Wimbledon London line is being extended

Road From Croydon city centre to the M25/M23 − Phase 1 from West Croydon to Dalston and Highbury & Islington is 20 minutes Junction through the A23 already complete, and in 2012 Phase 2 will extend to Clapham Junction(4)(5) Airport 36 minutes To Gatwick Airport, 2nd largest in the UK

Note: (1) Nomis official labour market statistics; (2) Croydon Observatory (http://www.croydonobservatory.org/keyfacts/); (3) Croydon Business (http://www.croydonbusiness.com/croydon2020.html); (4) This is Croydon report (Croydonedc.co.uk); (5) http://www.fairview.co.uk/site.asp?area=greaterlondon&article=kingstower.xml&page=news © 2019 RocSearch. All Rights Reserved. 2 Snapshot Location Analysis of Croydon

City Croydon London

Area of Metro District(1) • 87 sq km • 1,572 sq km

Population (2009)(2) • 342,800 • 7,753,600 Males • 167,900 (49.0%) • 3,851,200 (49.7%) Females • 174,900 (51.0%) • 3,902,400 (50.3%)

Transport Main Line Rail(3) • East Croydon Station (20.6m passengers travelling in 2009) is the • London Waterloo Station– Busiest rail Station (with 87.9m main station, followed by West Croydon Station (2.7m passengers) passengers in 2009), followed by London Victoria (70.2m passengers) Airport(4) • Gatwick Airport (33.0m passengers per annum) • Heathrow Airport (66.1m passengers per annum) • Bus Services: Part of TfL’s London Bus network with 20 bus routes into and out of Central Croydon. The X26 service gives direct access • Bus Services: Largest with 8,000 buses, 700 bus routes, and c.6m Bus to Heathrow and Kingston passenger journeys made every weekday

Size of Economy(5) • TBC • £265.1bn GVA

Employment(2) • 189,400 (79.1%) • 74.9%

Unemployment(2) • 8.6% (Croydon) • 9.1% (London), 7.9% (National Average)

Median Wage Per Week(2) • £613.4 (Men) • £642.0 (Men) • £496.4 (Women) • £551.0 (Women)

Note: (1) Croydon Observatory (http://www.croydonobservatory.org/Borough/); (2) Nomis official labour market statistics; (3) Office of Rail Regulation 2008-09 station usage; (4) Civil Aviation Authority Website; (5) ONS Report – December 2009 © 2019 RocSearch. All Rights Reserved. 3 Local Economy & Housing Market Location Analysis of Croydon

Local Economy Housing Market

▪ Over the past decade total employment in Croydon increased at a slower rate than ▪ Overall, the level of owner occupation increased modestly from 68% to 70% the Retail PROMIS average; growth in total employment to 2014 is forecast to be across the PROMIS centres between 1991 and 2001 around average − The level of owner occupation in Croydon is below PROMIS average

▪ In 2008, the services sector accounted for 91.7% of total employment in Croydon, with Public admin, education & health being the major employers (29.9%)

− Key Public Sector employers in the Croydon area include the Home House Type Average Sale Price July 2008 (£) Office, the Land Registry and the Borough Council. The Land Registry is, however, planning to close its Croydon office which employs 174 Flats & maisonettes 195,865 people Terraced houses 238,428

− Within Services sector, financial, IT & business services accounts for Semi-detached houses 310, 066 28.6%. The Financial & Business Services (F&BS) employers in Croydon include Direct Line Insurance, Aviva, Barclays Financial & Detached houses 518,178 Insurance Services, Abbey Life Assurance and AIG Europe. British Telecom is one of the largest employers in the area, with c.2,500 All property types 276,778 employees

− Retailing is also an important source of employment within the service Average House Sale Price (£) Date sector. In addition to those employees engaged within the town's Croydon London Region shopping centres, Superdrug and WH Smith also have offices in the town July 2004 230,836 272,104

July 2005 236,097 276,892 ▪ The manufacturing and construction sector in Croydon accounts for 3.2% and 4.9% of total employment July 2006 241,460 294,647

July 2007 268,985 343,469 ▪ Some major manufacturing employers in Croydon Borough include Nestle, Sigma Aerospace and Alpha Metals. Several of the main manufacturers have only office- July 2008 276,778 348,366 based functions in the town

Source: Promislive Croydon Retail Report, Nomis official labour market statistics, ‘This is Croydon’ Report

Quality of fashion retailers in Croydon

Catchment size and growth prospects

▪ The total population within the Croydon primary catchment area is 778,000, above the Regional Centre average and ranking the town 15 out of the PROMIS Centres

− The estimated shopping population of Croydon is 455,000, ranking the town 12 of the PROMIS centres, which is above the average for the regional centres. The CBRE shopping population is an estimate of the number of people who regard the town as their main shopping destination

Source: Promislive Croydon Retail Report

Town Centre Retail Provision

▪ Croydon's retail offer is predominantly mainstream. Whilst the town has a large number of multiples, there are relatively few quality retailers in contrast to its main competitors, Bromley and Kingston-upon-Thames ▪ Croydon has significantly below average volume and quality of retail provision relative to the size and affluence of the shopping population; in some; but not all cases, this can imply a shortfall in the provision of modern retail floorspace as well as reflecting the absolute size of the shopping population ▪ Although Croydon offers a broad range of middle and lower middle fashion retailers, it lacks the substantial representation of retailers within the upper middle/quality end of the fashion spectrum that is typical of Regional Centres, despite an influx of high fashion retailers with the opening of Centrale in 2003/2004

Shopping Centres

▪ Until relatively recently, the Whitgift Centre dominated retailing within Croydon town centre. Since its completion in 1969, this Centre has been refurbished and modernised and provides an attractive, covered retail environment on two main levels, with good shopper facilities. The Centre comprises a main mall (on two floors), which runs northwards from Whitgift Square, East and West Arcades, and two peripheral malls (Trinity Court and Chapel Walk) − The Whitgift Centre has a broad retail offer, which includes major tenants such as Boots, Superdrug and Sainsbury's, as well as some specialty retailers. Many of the town's fashion multiples such as Monsoon, River Island, Republic, Topshop/Topman and Wallis are situated within the Centre ▪ Other fashion retailers in Centrale include Miss Selfridge, Blue Inc, French Connection, Jane Norman, LK Bennett and La Senza

Prime Pitch

▪ The prime pitch in Croydon is within the Whitgift Centre, extending from River Island on the ground floor of the main mall to the unit occupied by H&M Hennes. The prime area is comparatively small for such a large PROMIS centre, comprising only 23 units in all

Convenience Provision

▪ Convenience shopping in Croydon town centre comprises a Sainsbury's superstore in the Whitgift Centre, a large foodhall within Marks & Spencer and a small Iceland store in the Surrey Street/Crown Hill area ▪ There are Sainsbury's Local and Waitrose supermarkets on the eastern end of George Street, en route to East Croydon station. Lidl trades from a store on London Road, north of the main shopping area ▪ There is also a Tesco Express at Leon House on High Street

Source: Promislive Croydon Retail Report

Vacancies, in-movers and closures

▪ At the time of the January 2010 survey the vacancy rate in Croydon town centre stood at 13.8% of units, marginally above the Retail PROMIS average and a slight fall on the level recorded in May 2008. The level of take-up between the May 2008 and January 2010 audit was 9.1% of units, above the PROMIS average

▪ The vacancy rate recorded at the time of the January 2010 audit excludes St George's Walk. Many of the units in this precinct lie vacant in preparation for possible redevelopment as part of the Park Place scheme; however, a handful of independent retailers were still trading at the time of the most recent audit

▪ On the prime pitch stretch of the Whitgift Centre, Swarovski, Game and Miss Prodigy have taken the units previously occupied by Baron Jon. The Disney Store and Ann Harvey. H&M Hennes has taken the large unit formerly occupied by Woolworths. There were no vacant units on the prime pitch at the time of the January 2010 audit

▪ The first phase of Centrale opened in 2003 and since then the centre has experienced a steady change amongst tenants. HMV has taken the unit previously occupied by Zavvi at the southern entrance to the centre; Blue Inc, TM Lewin, Fusion and Colors have taken units on the ground floor, whilst Whittard, Neck & Neck and Base ceased trading at this level. The Pier had ceased trading on the upper mall. The food court - Gallery Eat - was largely_ unoccupied, as Papa John's, The Real Pasty Company and Quiznos had all vacated their units, with Spudulike the only remaining A3 operator at the time of the January 2010 audit

Rents and Deals

▪ Prime retail rents in Croydon have generally been above the average for PROMIS Regional Centres although the rate of growth, slightly below average for the period of record

▪ At mid 2010, agent sources estimated prime rents in Croydon at £210 psf Zone A. This represents a decline on the end 2009 level of prime rents in the town

▪ At the time of audit in January 2010, agents report that prime rents are £240 psf Zone A. A unit at the north end of prime was let to Game in July 2009 at a rent reflecting this level. The lease on the unit let to Woolworths was assigned to H&M Hennes in June 2009

▪ Zone A rents for Whitgift Square and West Arcade - also part of the extensive ground floor of The Whitgift Centre - are around £200 psf Zone A. Zone A rents for units on the upper level range from £75-£80 psf depending upon the exact pitch

▪ There have been no recent open market lettings in Centrale, with latest lettings to Blue Inc and Colors settled on the basis of turnover related rents. The most recent review, dating from May 2008, was settled at £200 psf Zone A on the unit let to Aldo – with a North End frontage. In 2008, Zone A rents within the main mall of Centrale (ground floor level) were at £180-185 psf Zone A

▪ NatWest, trading as RBS, took a new lease on the former QS unit on North End in Summer 2006 in a deal that reflected £230 psf Zone A. Zone A rents for units within the main pitch of North End situated within close proximity of both shopping centres were around £200-£210 psf Zone A in 2007. 3 Store took an assignment of a lease on the former Levis' store in this area in Autumn 2007, where the passing rent reflected £206 psf Zone A. Further north, a rent review on the unit let to New Look was settled at £175 psf Zone A in 2008

▪ At the Marks & Spencer end of North End, a unit was let to 99p Stores in October 2008 at £151 psf Zone A. The rent review on the adjacent unit let to HSBC was settled at £150 psf Zone A in March 2007. Rent reviews dating from 2007 on the units let

Source: Promislive Croydon Retail Report

Investment Market

▪ Agent sources placed prime retail yields at 5.75% in Autumn 2010, showing no change on the level 6 months previous which was in-line with the pattern of broadly flat prime retail town centre yields across the majority of PROMIS Centres

▪ In March 2010, Scottish Widows Investment Partnership purchased Grants - a leisure scheme in Croydon town centre, for £32.5m, reflecting an initial yield of 7.75%. Tenants at Grants include Tiger Tiger, Vue cinema and Lloyds Bar

▪ In August 2009 a private UK Investor purchased 145-147 North End from Aviva Investors for £2.6m, reflecting an in! yield of 7.09%. The unit is let to Wesley Owen Bookshop

▪ In February 2009, a private investor purchased 2-4 High Street from CB Richard Ellis Investors for £1.3m. The deal reflected an initial yield of 9% and the units are let to Kanoo Travel, American Express and Croydon Cobblers

Superstores

▪ The Croydon area has an estimated 1,372,000 sq ft of floorspace (in superstores and supermarkets) in the area, ranking it 32 of the reported PROMIS Centres; provision per household is below average

▪ Many of the smaller foodstores in the area are located within local shopping centres, such as Mitcham, Purley, Selsdon, Coulsdon and Thornton Heath

▪ Although the area is well served for superstores, with 19 in the area (over 25,000 sq ft), there are only a few true ‘out-of-town’ stores. These include a large Asda at Wallington and Sainsbury’s at the Purley Way Centre, Warlingham and Wallington

▪ Sainsbury’s is the dominant supermarket in the Croydon area with 9 superstores, whereas Asda and Morrisons are under represented when compared to the PROMIS average

▪ Discount supermarkets, Lidl and Iceland are well represented in the Croydon area. Lidl opened stores in New Addington and Norbury in early 2010

▪ Croydon town centre is served by Sainsbury’s and Iceland supermarkets. On the edge of the town centre there is a Tesco Express on High Street and Waitrose and Sainsbury’s Local stores on George Street

Source: Promislive Croydon Retail Report

Town Centre Competition

▪ Kingston-upon-Thames, just over 50 minutes drive to the north-west, is Croydon's most significant competitor. With around 1.4 million sq ft of town centre floorspace, good department store provision and a diverse retail offer, including better up-market/speciality provision. Both John Lewis and Bentalls have department stores in the town, as well as fashion retailers Gap, Bank, Esprit, Hobbs, Ghost, Comptoir des Cotonniers, Hugo Boss, Jigsaw and Reiss. Kingston provides an attractive alternative to Croydon, particularly for more mobile, affluent residents

▪ We would expect Kingston to draw occasional shopping trips from the Croydon area, although congestion and parking problems may deter some shoppers

▪ The Council has prepared an Action Area Plan for Kingston town centre which indicates a possible future increase in retail floorspace of just over 500,000 sq ft. The Council is in negotiations to appoint a developer for the scheme

▪ Bromley, about half an hour's drive to the north-east, is another key competitor to Croydon. Although much smaller, Bromley, nevertheless, has a good range of multiples as well as House of Fraser and Debenhams department stores. The town's large, covered shopping centre, The Glades, was extended in May 2008, with H&M Hennes anchoring the extension. Another centre, The Mall, has also been substantially redeveloped and extended. However, Bromley also suffers from congestion and parking problems at peak times

▪ Sutton, just 20 minutes drive to the west, constitutes a less significant source of competition, despite the addition of a large new shopping centre in the early 1990s. Whilst key town centre retailers such as Marks & Spencer and Bhs are represented, the town's retail offer is considerably more limited than that of Croydon and seems unlikely to attract a significant amount of trade from Croydon residents

▪ The nearest major competitor to the south is Crawley, around 40 minutes drive away. Although the town has a large, modern shopping centre and has benefited from small-scale improvements to retail provision in recent years, both the retail mix and town centre environment remain uninspiring and we would not expect Crawley to draw a significant amount of trade from Croydon's catchment area

▪ There may, however, be longer term opportunities for the large-scale redevelopment of the town centre. Whilst John Lewis has apparently expressed an interest in anchoring a new shopping centre approaching 1 million sq ft in size, the scheme is on hold.

▪ Guildford may not be as large a centre as Croydon but has a more varied offer with a good range of up-market/speciality retailers. Planning permission has been granted for a substantial extension to the town's main shopping centre, The Friary Centre

▪ Residents of the Croydon catchment area may also make occasional, but potentially high spending, shopping trips into central London

Source: Promislive Croydon Retail Report

This document is proprietary to RocSearch and the information contained herein is confidential. Not without prior written permission from RocSearch, may this document be reproduced, either in whole or in part, or disclosed to others outside your firm.

Whilst care and attention has been exercised in the preparation of this document, RocSearch does not accept responsibility for any inaccuracy or error or any action taken in reliance on the information contained within. All warranties whether expressed or implied by statute, law or otherwise are hereby disclaimed and excluded to the extent permitted by law.

In case of any questions on this document, please reply to the sender.

About RocSearch Please visit www.rocsearch.com for more details on the company