Australian retail megalith the Westfield Group has entered into "exclusive arrangements" with the Whitgift Foundation to explore the redevelopment of the Whitgift Shopping Centre in Croydon, where the Foundation owns the freehold.

Whitgift had presented its plans to redevelop the shopping centre in its accounts ending 31 August 2010 and the new discussions with Westfield could lead to a significant financial boost for the Foundation, which saw its net income from investment properties drop by nearly £1.5m from the previous year to nearly £5.5m last year. 

The Foundation was established in 1596 with the aim of providing care for the elderly and education for the young and runs three independent schools and three care homes in the UK. It has a freehold property value of almost £66m and its assets "produce significant income to meet its commitments". 

Announcing the discussions with Westfield yesterday, Ian Harley, chairman of the court of governors at the Foundation, said: "The Whitfield Foundation, which owns the freehold of the Whitgift shopping centre and other town centre investment properties, has been working for many years to help bring about much-needed improvements to the town centre.

"The Foundation welcomes this agreement to work in partnership with Westfield and other key stakeholders to secure a major new investment in the retail centre of Croydon which is not only intended to achieve much-needed improvements to the Whitgift shopping centre but also help bring about the regeneration of the town centre generally."

Croydon saw several landmarks destroyed as part of the London riots, with the Whitgift shopping centre itself closed during the events. The location, however, is seen as "strategic" for Westfield, being close to Gatwick Airport and serving Surrey and Kent, as well as parts of Hampshire, East Sussex and West Sussex.

The redevelopment of the Whitgift Shopping Centre, which is already home to over 180 retailers, could potentially serve over three million customers, Westfield advised.

However, other stakeholders in the development present a potential stumbling block, advising of their discomfort with not having been consulted over the plans. The shopping centre's leasehold is owned by the Irish Bank Resolution Corp (IBRC) and Royal London Asset Management. Royal London advised that it was "aware of several other major shopping centre developers similarly capable of delivering an excellent scheme in Croydon".