“Westfield sale could open new chapter in city transformation” – John Forkin
John Forkin, Managing Director of Marketing Derby, talks about what the sale of the Westfield shopping centre means to the city.
I’ve been asked by many people if the sale of Westfield Derby is a good or bad thing for the city.
The answer will very much depend on who has the wherewithal to spend £400 million and what they intend to do with the mall once they own it. It’s my view that the right buyer could open up significant new opportunities.
Let’s start with the facts. In 2007, Westfield completed its £340 million extension to the Eagle Centre. Obviously, it was so much more than an extension and, overnight, Derby leapt into the shopping centre premier league.
In a world where size matters, Westfield Derby‘s million square feet of retail space placed the city immediately below Birmingham, Newcastle and Milton Keynes, and above the likes of Bristol, Nottingham and Leeds.
The world’s number one retail developer had sprinkled its magic dust and Derby was never to be the same again. Of course, 2007 was different. We lived in a world of never-ending growth, consumer booms and lashings of optimism. It was a world where that pesky cycle of boom and bust had been eradicated.
That was, until the music stopped, the lights came on and we tumbled into a catastrophic financial crash and the worst recession ever. It began soon after Westfield Derby opened its doors.
Only now, in late 2013, are we beginning to shake off the headache of the world’s greatest hangover following its craziest party. The strategic rationale behind Westfield’s development and sale of its Derby centre lies in the difference between the world of 2007 and 2013.
Back in 2007, Westfield intended to develop malls across the UK, to “do a Derby” in Nottingham, Bradford, Belfast and other locations. The crash stopped all development outside of its “mega-centres” in London and, one by one, the regional disposals began.
By 2013, as a global player, Westfield was focusing on iconic global locations. In the UK, this means London. In mainland Europe, this means Milan. A few weeks ago, I saw its new site under construction in New York city.
It doesn’t take a genius to figure out that Derby doesn’t quite fit this worldwide shoe and the disposal will free up valuable development cash. Westfield Derby is a massive success and its 25 million annual visits match that of Meadowhall.
It’s pretty much fully occupied and recently has been successful in attracting high-profile brands, such as Patisserie Valerie, Wagamama and Ed’s Easy Diner. Fashion store Superdry is one of a few retailers that have relocated into larger units in the centre. This, plus a warming investor market, should make the sale a success.
In many ways, Westfield has done the hard work and added the value. It took the risk and invested in Derby when many others wouldn’t give the city a second look. Today, 3,000 people have a job because of that and the mall is a fantastic platform for whoever does the deal.
At a minimum, a sale will mean a change in name on the door. It’s vital that any new investor continues to operate the centre as the clean, safe, attractive and vibrant environment it is today. However, as a city, we should be seeking more than this. It is important that bidders are aware of the wider city investment pipeline.
I include in this the 1 million square feet of city centre offices to be developed in the next 10 years, the 1,000 plus new housing units and the new leisure schemes along the riverside. A new investor could bring fresh eyes and there is now a real opportunity to finally unlock city blights such as the Debenhams area and the Castle and Falcon gateway – both of which are included in the sale.
Westfield was a dramatic start to Derby’s £2 billion master plan. Maybe its sale could kick-start another chapter.