The company behind Lakeside shopping centre has gone into administration less than 24 hours after Thurrock council approved a major expansion.
Members of the planning committee were enthusiastic about the benefits the expansion could bring to Thurrock during a planning meeting on Thursday night but failed to address whether Lakeside owner Intu will actually be able to go ahead with the £168million scheme in light of severe financial troubles.
The following day, Intu announced it had gone into administration as a result of billions of pounds of debt caused by Covid-19 and the declining value of its shopping centres.
The company fell into administration after failing to reach an agreement with lenders and appointed the company KPMG as administrators. Earlier this week it warned that if the crunch talks failed it could mean the closure of some shopping centres.
During Thurrock’s planning committee meeting on Thursday, a statement from Intu Properties was read out which focussed optimistically on the future of Lakeside but failed to address the financial issues.
It said: “As you are aware our most recent focus has been on the delivery of our £175million leisure scheme and we want to continue to position Intu Lakeside for the future building on the success of that leisure scheme.”
The statement added that Intu “firmly believes” Lakeside will continue to be a success despite “current challenges”.
Members of the planning committee also ignored the issue, with Labour councillor Gerard Rice speaking enthusiastically about how the expansion could be “shovel-ready” – a term used by the government to encourage rapid development to help the economy recover.
Mr Rice said: “The prime minister did say recently he is looking for shovel ready projects and obviously that means to get it going as soon as possible and we all know that employment in our economy is a scarce recourse and we can see unemployment going up.
“Anything that can fill those gaps quickly would be welcomed.”
A council planning officer said planning documents indicate work could happen over the next four to five years.
But when Intu was asked if the planned expansion will actually be possible in light of the company’s financial problems, it declined to comment.
Under the plans approved by councillors, part of the Debenhams store will be demolished and a new multi-storey car park will be built, along with a ‘town square’. To the north of the centre will be a new street-style shopping area, while the existing bus station will be knocked down and replaced with a three-storey department store.
To make up for the loss of the bus station, a new and modern replacement will be built at the opposite side of the shopping centre, close to the footbridge that connects to Chafford Hundred Station.
In total, it is expected to create around 3,700 jobs when temporary construction work is combined with the new jobs in retail and other services.
Labour councillor Victoria Holloway, who represents the West Thurrock and South Stifford ward, said: “I hope that by the council granting planning permission last night it actually makes Lakeside a more valuable asset.
“It shows this is a council willing to invest in this shopping centre and help it survive so I am hopeful this planning permission puts Lakeside in a stronger position from an administrator’s perspective.”
She added that she expects there will be “a lot anxious people” in her ward as well as across the borough and called Lakeside an “integral” part of the Thurrock community.
Earlier this week, Ms Holloway said the loss of the shopping centre would be “devastating” for the town and would lead to the loss of thousands of jobs.
Southend Council’s deputy leader, Councillor Ron Woodley, said: “It is a great shame, these kinds of businesses generate a lot of employment and bring a lot of people to the shops. I hate to see businesses go under like this.
“Lakeside has an enormous variety of shops and it goes to show that even with the shops you need to be able to attract the footfall.”
In September last year, shares in Intu surged when it was revealed that private equity firm Orion Capital Managers was considering a buyout.
Orion already owns a portion of the company’s shares and had been reportedly looking for a partner for the takeover.
However, little has been said on the takeover bid in recent months and two previous takeover bids already failed.
The first attempt came from Hammerson, a real estate investor, which offer £3.4billion for the business in 2018, that same year a partnership between the Peel Group, Brookfield Asset Management and the Olayan Group offered £3billion.