Real estate investment trust Hammerson and Westfield have entered into a joint venture worth 1bn pounds to redevelop the retail centre of Croydon.

As part of the joint venture, Westfield has acquired a 50% interest in the £115m Centrale shopping centre from Hammerson.

The joint venture will also purchase a 25% interest in the Whitgift Centre, following completion of Hammerson's conditional acquisition agreement with Royal London.

Under the new joint venture agreement, Westfield and Hammerson intend to redevelop and combine the two main Croydon shopping centres, the Whitgift Centre and Centrale, to deliver a comprehensive and transformational change to Croydon.

The mixed use scheme of around 200,000 square metres will include retail, leisure and residential spaces with the potential for hotels and offices. It is expected to create over 5,000 new jobs.

Hammerson and Westfield will meet with all stakeholders over the coming weeks to discuss their plans for Croydon, following which a revised masterplan will be created combining the best elements of both schemes. It is anticipated that planning consent could be secured in 2013, with construction expected to start on site in 2015 for the approximately £1.0bn scheme.

Westfield and Hammerson have set up a joint management company which has responsibility for development, leasing and asset management of the completed scheme.

David Atkins, Chief Executive of Hammerson, said: "We have shown our commitment to Croydon through our existing investments in the town centre and I believe that by working together we can deliver a world class scheme for retailers and residents. Both we and Westfield remain excited and convinced by the opportunity in Croydon, which we can now progress with clarity."

Boris Johnson, Mayor of London, said of the development: "Croydon has huge potential to return to its former glory as one of London's most vibrant town centres, and a major driver of its economy. The redevelopment of the Whitgift Centre at its heart is crucial to this vision."

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