Don’t change a winning strategy: focusing on shopping centres that are great destinations in locations in Europe and some selected US cities has worked well for Unibail Rodamco Westfield, Sam Warwood, Group Director of External Relations, told Real Estate Day.
‘Unibail Rodamco Westfield is very much the same after last year’s merger,’ he said. ‘Our strategy, as in the past few years, has been to concentrate on the ownership of flagship retail destinations in key districts in key cities that have great connectivity, great footfall and really offer a unique and strong experience for our customers’.
The ‘marriage’ of the two businesses has worked well precisely because Westfield had a similar strategy and had been selling off a lot of their more secondary assets over a number of years, he said.
The total business is now ‘very substantial’, with €65 bn worth of assets.
A key location is London, ‘a market that we would have loved to have been in for a long time because it’s a very strong market in Europe and also critical for retailers coming into Europe,’ Warwood said.
The US is also an important market but being selective is key. ‘Our strategy is not to be in the US, which you have to remember it’s a market nearly as big as as Europe,’ he said. ‘We are in a very small part of it which is primarily California, markets like LA, San Francisco, San Diego and also New York, New Jersey, one asset each in Chicago and Seattle’.
Having high-quality assets means that there is no need to repurpose them as many in the retail sector are doing, but there are still creative options to explore.
‘Densification has become a bit of a buzzword among the shopping mall landlords but we have to be careful,’ Warwood said. ‘Right now retail has become a dirty word and a lot of people want to attach more popular words like mixed-use or last mile logistics to their assets. For us it’s more about two related ideas: using the land we have and don’t use to make money and making our assets play a role in connecting and growing a community around them’.
These ideas have been put into practice in Paris, where the group has added offices to their shopping centre and in Stratford in London, where residential has been added.
‘We have 1,200 private rented apartments which are a profit maker for us and we’re doing it with partners so the risk is balanced,’ he said. ‘It can be seen as a deviation from our core focus on retail, but it will bring a lot of additional shoppers who are going to live right above the mall so it’s a win/win for everybody involved’.
Contact the editor here.