London Will Take To Mega Mall, Westfield Insists

Sydney Morning Herald

Tuesday October 28, 2008

Carolyn Cummins

WESTFIELD GROUP is confident it can defy the current economic climate with the right retail mix when it opens its #1.7 billion ($4.35 billion) London shopping centre this week.

The megacentre, in the White City district, will be the first of its kind in a city that has always shunned indoor malls.

But Westfield's joint managing director, Steven Lowy, said the 330 shops, 50 restaurants, numerous cafes and 14 cinemas would cater for all tastes and shopping budgets. Among the retailers would be Gucci, Prada, Louis Vuitton, Top Shop, Zara, and five department stores and supermarkets.

The project, of which Westfield's equity share is #1.1 billion, is half-owned by Westfield and the Commerz Real Investments of Germany.

"There is no denying the environment is pretty gloomy, but we have seen it all before and we will power through it," Mr Lowy said. "In these tough times we have been able to lease it to 99 per cent, and while there are rent incentives for leases, covering about 18 months of the contracts, we are very happy with the outcome.

"It is a big physical presence, and while it's always nicer to open in a boom, these buildings are built for the long term."

Mr Lowy said he disregarded the argument that the English preferred shopping along the High Street than in a mall.

"We offer shelter [it is forecast to be 3 degrees in London on Thursday when the centre opens], a selection of retailers for everyone and parking and security."

Mr Lowy confirmed the expected yield on the centre would be about 5.4 per cent, and despite the current economy he remained confident of the group achieving its forecast 106.5c a security full year distribution.

Meanwhile, investors remained less impressed with the troubled GPT group when its units were sold down 31c to 84c after it resumed trading following news of its $1.6 billion capital raising.

The trust, which last week ousted its chief executive, Nic Lyons, said it would defend any class action and calls for other meetings by disgruntled investors. The law firm Slater & Gordon said any class action would be brought on behalf of those who bought stapled securities in the period February 28 to July 6.

Elsewhere, the Goodman Group is due to release details today of its $500 million-plus cash raising and possible privatisations of its unlisted funds owned jointly with Macquarie Bank in Asia and other asset sales.

FKP also confirmed it would tap the market for between $104 million and $151 million.

© 2008 Sydney Morning Herald

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