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Trafford Centre threatened with closure; could the Metrolink line be a white elephant?

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daodao

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Moderator note: Split from https://www.railforums.co.uk/threads/manchester-metrolink-trafford-centre-extension.171586/

Trafford Centre owners Intu have warned that the shopping centre could be forced to shut - as it appointed KPMG to prepare a contingency plan for administration.

Intu Properties remains locked in crunch talks with lenders as it struggles with £5bn debts after being hard hit by debt and the coronavirus pandemic.

The group, which also owns the Lakeside shopping centre in Essex, confirmed today it has put KPMG on standby as administrator and is negotiating details with lenders as it looks to secure vital breathing space ahead of a deadline on Friday.

On 19/3/20, in post 124 of the thread https://www.railforums.co.uk/threads/manchester-metrolink-trafford-centre-extension.171586/ I stated "A most unfortunate time to be opening a new service to the Trafford Centre - I wonder whether the launch will be cancelled. The anchor store in the Trafford Centre (Selfridges) closed down only yesterday and Intu (who own and run the Trafford Centre) are in financial difficulties; the Coronavirus pandemic is likely to push them over the edge. Nearby entertainment facilities and the Imperial War Museum North have now closed for the foreseeable future. This new tram line could become a white elephant."

It does seem with the imminent bankruptcy of Intu and likely long-term closure of the Trafford Centre that the Trafford Park line, which presumably has seen little use in the last 3 months, will indeed become a white elephant.
 
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Ianno87

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I find it hard to believe that a site as large as the Trafford Centre would fall into disuse completely. Anybody that purchases it (in the event of intu going bust) could be able to change its use to make it less retail-oriented. It is a huge draw and still very lucrative from shoppers, diners and cinema-goers.

Besides, the Trafford Park line is as much about serving Trafford Park along the way as the Trafford Centre itself.
 

Bletchleyite

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I would consider it highly unlikely it will close. One of two things will happen - it will be a sneaky pre-pack administration, or someone else will buy it for next to nothing in the "fire sale" and themselves reopen it.

Intu certainly has in their portfolio a few centres that might well die completely, but it won't be the big names - it won't be Midsummer Place in MK either.

Has a single UK large shopping centre[1] ever closed down entirely? I know it's happened in the US, though.

[1] I'm not counting small collections of indoor shops like the Manchester University Precinct Centre which has gone, but wasn't really a shopping centre in that sense, more a small collection of student-oriented small businesses that happened to be indoors.
 

johnnychips

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I would consider it highly unlikely it will close. One of two things will happen - it will be a sneaky pre-pack administration, or someone else will buy it for next to nothing in the "fire sale" and themselves reopen it.

Intu certainly has in their portfolio a few centres that might well die completely, but it won't be the big names - it won't be Midsummer Place in MK either.

Has a single UK large shopping centre[1] ever closed down entirely? I know it's happened in the US, though.

[1] I'm not counting small collections of indoor shops like the Manchester University Precinct Centre which has gone, but wasn't really a shopping centre in that sense, more a small collection of student-oriented small businesses that happened to be indoors.
They have two centres in Nottingham and one in Derby, which seems a bit excessive. But as you say, this sounds like some clever accountancy plan.
 

Gathursty

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John Whittaker was savvy enough to buy the Machester Ship Canal, Salford Docks and Trafford Industrial Estate in the 80s. He will have a plan one way or another regarding the Trafford Centre.
 

ChrisC

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They have two centres in Nottingham and one in Derby, which seems a bit excessive. But as you say, this sounds like some clever accountancy plan.

One of the two Intu shopping centres in Nottingham is currently under redevelopment. The Broadmarsh Centre is now half demolished in preparation for rebuilding. Demolishment was stopped at the beginning of the Coronavirus lockdown but when Intu ran into difficulties it was not continued. This week even the scaffolding has been removed. The small number of stores still open at the other end of the Centre have now closed due to safety issues and Nottingham is now left with a huge demolition site blocking the way from the railway station to the city centre.
 

Starmill

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Intu Properties have appointed a firm to undertake their administration this week, should the need arise. The company have breached their commitments to their lenders, with whom they are now in negotiations. If these negotiations produce no new deal this week, the company will fall into administration.

As I understand it (I'm prepared to be corrected), if the company can ensure that their administrators are adequately capitalised, which is still possible in theory, trading need not cease.

If the administrators aren't adequately capitalised, trading would cease while they organise the sales of the assets. This would mean that the shopping centres would indeed remain locked one morning. They are still inherently valuable assets though, this one in particular was a good performer right up until Covid-19. A buyer would likely be found who reopened within days.

Some of the other assets on Intu's books may prove significantly more challenging to raise cash from the sales of.
 
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Edgeley

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Use the car parks as a giant park-and-ride for commuting into Manchester.

Convert the interior to a standby Nightingale hospital and a socially-distanced college.

Sorted!
 

Djgr

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It should be remembered that there was a lot of opposition to the Trafford Centre before it was built because it was felt that it would suck trade out of the city centre. This hasn't really happened, although similar out of town centres have (notably, in my opinion, Meadowhall and Sheffield).

I don't think we will see any new Trafford Centres any time soon, but the financial shenanigans currently in process will ensure its survival, with financial pain shared amongst the guilty and innocent.
 

Silverlinky

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I would consider it highly unlikely it will close. One of two things will happen - it will be a sneaky pre-pack administration, or someone else will buy it for next to nothing in the "fire sale" and themselves reopen it.

Intu certainly has in their portfolio a few centres that might well die completely, but it won't be the big names - it won't be Midsummer Place in MK either.

Has a single UK large shopping centre[1] ever closed down entirely? I know it's happened in the US, though.

[1] I'm not counting small collections of indoor shops like the Manchester University Precinct Centre which has gone, but wasn't really a shopping centre in that sense, more a small collection of student-oriented small businesses that happened to be indoors.

Having travelled Route 66 last year we stopped off in many places and I was staggered to see what had happened to "normal retail" there. Like you say, yes whole shopping centres have closed down, built only in the 80's and 90's but now obsolete such is the reliance on online retail. Of course, the marquee shops in big cities will survive, 5th Avenue in NY and the like but out of town shopping centres are struggling.....and this was before COVID......
 

edwin_m

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I hope TfGM got their funding contribution out of Intu for the tram line...

Even were the Trafford Centre to disappear entirely, with other employment nearby the tram line would probably still carry enough people to cover its operating costs, and therefore it would make better financial sense to keep it going than to shut it down. However, it would have been much more difficult to make the case to build the tramway had the Centre not been there are the time.
 

LNW-GW Joint

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The tram line actually improves the prospects for the Trafford Centre and the other premises on the route.
There might be a realignment of the retail estate because of Covid-19 and its aftermath, but long term might not be badly affected.
TfGM might ease off on their service development plans though (frequency, route etc).
Crowds returning to Old Trafford would help, of course.
 

Vespa

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Trafford Centre is too big to fail and is very popular, the car park gets full every day.

The owners just need to work with the retailers over rent etc, any money comng is better than nothing, after all 20% of nothing is still nothing.
 

Ianno87

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The tram line actually improves the prospects for the Trafford Centre and the other premises on the route.
There might be a realignment of the retail estate because of Covid-19 and its aftermath, but long term might not be badly affected.
TfGM might ease off on their service development plans though (frequency, route etc).
Crowds returning to Old Trafford would help, of course.

You could probably live with the current shuttle service from Cornbrook for the time being.
 

ainsworth74

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Having travelled Route 66 last year we stopped off in many places and I was staggered to see what had happened to "normal retail" there. Like you say, yes whole shopping centres have closed down, built only in the 80's and 90's but now obsolete such is the reliance on online retail.

If people are interested in that sort of thing there's all sorts of videos out there by various Urbex type people having a look inside abandoned malls (to give them their American name). For instance:

 

Bletchleyite

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Trafford Centre is too big to fail and is very popular, the car park gets full every day.

The owners just need to work with the retailers over rent etc, any money comng is better than nothing, after all 20% of nothing is still nothing.

Even if it closed as a retail centre, someone would change it to an entertainment venue or something. It won't be razed and left as wasteland - there's as much chance of that happening as the same happening to the Manchester Arndale, notwithstanding that the IRA attempted that in 1995.
 

Skymonster

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Trafford Centre is too big to fail and is very popular, the car park gets full every day.

The owners just need to work with the retailers over rent etc, any money comng is better than nothing, after all 20% of nothing is still nothing.
The problem isn't the Trafford Centre as such, it is the owner's - Intu's - precarious financial situation which has the potential to impact many of its properties across the country. I suspect the likelihood is if Intu collapses into administration, another investor will pick up some of the well performing properties such as the Trafford Centre.
 

Mcr Warrior

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It won't be razed and left as wasteland - there's as much chance of that happening as the same happening to the Manchester Arndale, notwithstanding that the IRA attempted that in 1995.
Saturday 15th June 1996 was when the IRA undertook their multi-million pound makeover of Manchester City Centre. Some things you don't forget! :|
 

317 forever

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The problem isn't the Trafford Centre as such, it is the owner's - Intu's - precarious financial situation which has the potential to impact many of its properties across the country. I suspect the likelihood is if Intu collapses into administration, another investor will pick up some of the well performing properties such as the Trafford Centre.

Especially if most or even all shops are profitable, it would be a nonsense for the shop owners and customers alike to close the Trafford Centre altogether.
 

Djgr

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They'd probably have to close for a period of time while new leases are negotiated with the new owner. This happened at the Preston Guild Hall, for one example.

Oh yes. I stumbled into there by mistake. A complete mess
 

Baxenden Bank

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Coronavirus is a short-term thing. Probably not as short as most people would like, and having some notable impact on the way (where will I buy my hiking boots at a decent price if Go Outdoors disappears?). The development of the Metrolink line is a long-term investment and businesses/premises will come and go in that time. 25 years ago (perhaps a bit more?) Trafford Park was a post-industrial wasteland. 50 years ago it was a thriving manufacturing hub with busy docks next door and an internal railway system. Even if the mall closed permanently, there are other non-mall activities and something would be done with the site of the mall. In reality, it will stay open or re-open quickly.
 

Bletchleyite

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Coronavirus is a short-term thing. Probably not as short as most people would like, and having some notable impact on the way (where will I buy my hiking boots at a decent price if Go Outdoors disappears?)

Go Outdoors is resolved - they've pre-packed it. The cynic would suggest that Intu will do the same.
 

Mugby

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Intu were in the middle of a multi-million pound revamp of the Broadmarsh Centre in Nottingham. All work has now been stopped and last week the contractors removed the scaffolding from the site. Looks like Nottingham could be stuck with an abandoned ruin for some considerable time.

Believe me, as you walk down from Nottingham Station towards the city centre, it looks absolutely horrendous. I think they'll need to put some sort of cladding up to hide the view of the wreckage!
 
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