London was yesterday, the official home of Britain’s largest shopping mall with the launch of the $2.8 billion Westfield London Shopping Centre in Shepherd’s Bush (White City), a massive 265-store, glass-roofed shopping center. The centre’s owners; Westfield and Commerzbank AG are confident that the looming British recession; the worst since 1991 will not negatively affect the potential profits of the centre’s future.
Steven Lowy, managing director of Australian based Westfield said in an interview withthat the project was built with the future in mind. It is supposed to withstand the various cycles of the economy and owners are positive they will have no problems to turn a healthy profit in times to come.
What is interesting to see is that 99 percent of the center is already let to shop owners. Given the fact that this will be a difficult Christmas season for many UK shoppers and retailers this is quite astounding. The mall is home to some of the most prestigious retail outlets such as Louis Vuitton, House of Fraser, Christian Dior, etc.
Worst Commercial Property Slump
The developers of the new mall couldn’t have picked a worse time for their launch though as the value of UK retail properties has fallen by 25 percent in the last 16 months.
The new mall is targeted to serve 20 million shoppers per year and Westfield aims for sales of £1 billion. The 149,000 square meter mall has also been graced with 4,500 new car parking spaces and a brand newto accommodate traffic.
One reason why Westfield managers are so confident about the success of their new mall is the fact that London’s 7.5 million residents were only served by four regional shopping centres, including the new one. Comparably a large US city would boast of a minimum of ten. It took seven years to come together and Westfield is already planning another mall expected to be built by 2011 near the 2012 Olympic Park.
There is no doubt that the confidence of the developer can pay off handsomely as UK developer Helical Bar has already applied to build 4.5 million square feet of homes and offices next to the mall. This will bring enough business to the area and with time, even a lagging economy can pick up to create positive cash flow.
For now, UK shoppers are laying low, with many people not able to shop at all.
Retail sales in the country fell by 0.4 percent in September.
Photo credits: DG via flickr forand the .