To no great surprise, the Office of Fair Trading has concluded there are no grounds for a Competition Commission probe into Capital Shopping Centres’ takeover of the Broadmarsh Shopping Centre.
I’m not going to go into a rehash of the whys and wherefores of this process, other than to puzzle over why it happened in the first place – there was little likelihood of it leading anywhere.
All it really meant was further delay in a city where major retail redevelopment should have taken place anywhere between five and 15 years ago.
So, over to CSC and the question of what its intentions are now that it owns both the Victoria Centre and Broadmarsh.
Is it going to run Broadmarsh as a value retailing location and put all the posh frocks in the Vic Centre, or will it go at least some way towards satisfying the city council’s wish to redevelop Broadmarsh in a way which rids Nottingham of what many consider to be an ugly embarrassment?
In particular, what will it do to satisfy Marks & Spencer, which surely wouldn’t want to be in the same centre as John Lewis and House of Fraser? What will it do for Apple and Hollister, who were lined up to go near the foot of Bridlesmith Gate?
CSC has so far managed to avoid saying anything publicly. It can’t maintain that position much longer.
Showing posts with label CSC. Show all posts
Showing posts with label CSC. Show all posts
Wednesday, 14 March 2012
Thursday, 1 March 2012
Clock ticks on Broadmarsh
For some time now, there’s been very little in the way of news about Capital Shopping Centres’ intentions towards Nottingham.
You’ll recall that the owner of the Victoria Centre shocked nearly everyone in town when it pulled off a late night deal back in November to buy the rival Broadmarsh Centre from Westfield.
The shock came not just from the fact that no one locally had any inkling that the bombshell was about to drop, but also because it called into question whether an decrepit 1960s eyesore was ever going to be dragged into the 21st century.
Those fears may be well-placed.
CSC has kept its counsel in recent weeks, officially because it was waiting to find out whether the Office of Fair Trading - which had decided to cast its eye over a deal which handed over an entire city to one operator – thought the purchase merited intervention on competition grounds.
The OFT told me upfront that it had been its own decision to examine the acquisition because it routinely looks out for major transactions of this kind. Perhaps; but rumours suggest the OFT may have been economical with the truth there, and that what we’ll call a prominent industry institution had been whispering in its ear.
Even more intriguing was a statement buried away in CSC’s annual results last week, which said it was “optimistic” about Nottingham’s retail potential provided there was a “pragmatic approach” from Nottingham City Council, the planning authority.
Put that together with a statement elsewhere in the results where it talks about “complementary redevelopment” in Nottingham and what have you got?
Pretty clear evidence that CSC wants to plough serious money into the Victoria Centre, not Broadmarsh.
How come? Suggesting optimism about Nottingham’s retail potential, rather than the new asset it’s just bought (Broadmarsh), tells me it thinks the immediate potential is in its existing asset, the Victoria Centre. Remember that this has a book value of £333m, while CSC says Broadmarsh has a book value of only £65m. This is not only less than the Vic Centre, but £8m less than it paid for it only four months ago.
The giveaway is surely the use of the term “pragmatic”. While it never said so publicly, the City Council was desperate for Westfield to go ahead with an ambitious redevelopment of Broadmarsh because it would have replaced Berlin Wall-standard concrete blight with a new gateway to the city centre.
CSC presumably believes a pragmatist would realise that it is unrealistic to expect the owner of a £333m shopping centre to spend disproportionate fortunes bringing the ugly sister down the road up to the same standard. After all, what would that do to the asset value of the Vic Centre?
The whole point of CSC’s purchase of Broadmarsh was to take out the competition.
The prospect of Broadmarsh being left to fester as a relic full of cheap retailers is one which will appal some people inside the City Council. They had been looking for a commercial partner who, in return for wholehearted support, would invest in development which dovetailed with the long-term strategy for the city centre.
A “shed half way up Mansfield Road” (as the Victoria Centre expansion plan was described to me privately) doesn’t tick that box, and may drastically tip the commercial centre of gravity away from a Southside quarter which is, in every sense, front and centre of City Council thinking.
When the City Council next gets round the table with CSC it still has a couple of cards left in its deck. One is its ownership of land near the Victoria Centre which CSC theoretically needs to allow expansion there.
The other is a ticking clock. A number of upmarket retailers had been ready to sign deals for units in the first stage of the (now abandoned) Broadmarsh redevelopment. They have already been waiting a long time to come to Nottingham. Will they continue to kick their heels if CSC gets involved in a drawn-out battle about the Vic Centre with city planners?
Or will they go elsewhere in the city centre instead?
You’ll recall that the owner of the Victoria Centre shocked nearly everyone in town when it pulled off a late night deal back in November to buy the rival Broadmarsh Centre from Westfield.
The shock came not just from the fact that no one locally had any inkling that the bombshell was about to drop, but also because it called into question whether an decrepit 1960s eyesore was ever going to be dragged into the 21st century.
Those fears may be well-placed.
CSC has kept its counsel in recent weeks, officially because it was waiting to find out whether the Office of Fair Trading - which had decided to cast its eye over a deal which handed over an entire city to one operator – thought the purchase merited intervention on competition grounds.
The OFT told me upfront that it had been its own decision to examine the acquisition because it routinely looks out for major transactions of this kind. Perhaps; but rumours suggest the OFT may have been economical with the truth there, and that what we’ll call a prominent industry institution had been whispering in its ear.
Even more intriguing was a statement buried away in CSC’s annual results last week, which said it was “optimistic” about Nottingham’s retail potential provided there was a “pragmatic approach” from Nottingham City Council, the planning authority.
Put that together with a statement elsewhere in the results where it talks about “complementary redevelopment” in Nottingham and what have you got?
Pretty clear evidence that CSC wants to plough serious money into the Victoria Centre, not Broadmarsh.
How come? Suggesting optimism about Nottingham’s retail potential, rather than the new asset it’s just bought (Broadmarsh), tells me it thinks the immediate potential is in its existing asset, the Victoria Centre. Remember that this has a book value of £333m, while CSC says Broadmarsh has a book value of only £65m. This is not only less than the Vic Centre, but £8m less than it paid for it only four months ago.
The giveaway is surely the use of the term “pragmatic”. While it never said so publicly, the City Council was desperate for Westfield to go ahead with an ambitious redevelopment of Broadmarsh because it would have replaced Berlin Wall-standard concrete blight with a new gateway to the city centre.
CSC presumably believes a pragmatist would realise that it is unrealistic to expect the owner of a £333m shopping centre to spend disproportionate fortunes bringing the ugly sister down the road up to the same standard. After all, what would that do to the asset value of the Vic Centre?
The whole point of CSC’s purchase of Broadmarsh was to take out the competition.
The prospect of Broadmarsh being left to fester as a relic full of cheap retailers is one which will appal some people inside the City Council. They had been looking for a commercial partner who, in return for wholehearted support, would invest in development which dovetailed with the long-term strategy for the city centre.
A “shed half way up Mansfield Road” (as the Victoria Centre expansion plan was described to me privately) doesn’t tick that box, and may drastically tip the commercial centre of gravity away from a Southside quarter which is, in every sense, front and centre of City Council thinking.
When the City Council next gets round the table with CSC it still has a couple of cards left in its deck. One is its ownership of land near the Victoria Centre which CSC theoretically needs to allow expansion there.
The other is a ticking clock. A number of upmarket retailers had been ready to sign deals for units in the first stage of the (now abandoned) Broadmarsh redevelopment. They have already been waiting a long time to come to Nottingham. Will they continue to kick their heels if CSC gets involved in a drawn-out battle about the Vic Centre with city planners?
Or will they go elsewhere in the city centre instead?
Thursday, 24 November 2011
Broadmarsh: They think it's all over...it is now
Capital Shopping Centres now owns Nottingham.
Well, in retail terms anyway.
It agreed a deal today to buy the remaining 25% shareholding in Broadmarsh from the Royal Mail Pension Fund. With the 75% it agreed to buy from Westfield for £55m, it means it now has complete ownership of the centre.
For those interested, it paid £18.3m for the pension fund’s 25%. It’s the same quantum as the Westfield price, and probably a premium over the paper value.
The wording of CSC’s announcement, made to the Stock Exchange, is interesting.
CSC had said it wanted to pump £250m into expanding the Victoria Centre, which it already owns. The fear in Nottingham was that this would mean a more ambitious revamp of Broadmarsh – which would also tidy up a massive eyesore on the southern approach to the city – would be sidelined.
Not only that, but the artist’s impressions of what CSC has said it wants to do to the Victoria Centre are, shall we say, quite traditional (and that’s putting it politely
Anyway, this is what David Fischel, CSC’s chief exec, said in today’s announcement:
“CSC is delighted to have acquired this important asset in Nottingham. Common ownership of Victoria Centre and Broadmarsh greatly improves the prospect of transformational retail and leisure led development taking place within the city to the benefit of the local and wider Nottingham community.
“The Victoria Centre has been at the heart of Nottingham for over 40 years and this acquisition further underlines our commitment to the city, which is one of the UK's top ranking retail destinations. We look forward to working with Nottingham City Council on this exciting opportunity.”
That may just be holding back an already familiar deck of cards. Or it could be an olive branch to a City Council which privately has considerable concerns about what CSC may – or may not – do. Or, it could be an indication that, now it’s got two centres, it will revise both plans.
Legal completion of the purchase hasn’t gone through yet, so I doubt we’ll hear a categorical statement of intent until then. CSC will also be discussing its options with the likes of Harvey Nichols, Marks & Spencer, Apple and Hollister, all of whom had agreements of varying status in relation to Westfield’s Broadmarsh redevelopment.
Either way, it’s time for CSC to start talking to Nottingham.
Well, in retail terms anyway.
It agreed a deal today to buy the remaining 25% shareholding in Broadmarsh from the Royal Mail Pension Fund. With the 75% it agreed to buy from Westfield for £55m, it means it now has complete ownership of the centre.
For those interested, it paid £18.3m for the pension fund’s 25%. It’s the same quantum as the Westfield price, and probably a premium over the paper value.
The wording of CSC’s announcement, made to the Stock Exchange, is interesting.
CSC had said it wanted to pump £250m into expanding the Victoria Centre, which it already owns. The fear in Nottingham was that this would mean a more ambitious revamp of Broadmarsh – which would also tidy up a massive eyesore on the southern approach to the city – would be sidelined.
Not only that, but the artist’s impressions of what CSC has said it wants to do to the Victoria Centre are, shall we say, quite traditional (and that’s putting it politely
Anyway, this is what David Fischel, CSC’s chief exec, said in today’s announcement:
“CSC is delighted to have acquired this important asset in Nottingham. Common ownership of Victoria Centre and Broadmarsh greatly improves the prospect of transformational retail and leisure led development taking place within the city to the benefit of the local and wider Nottingham community.
“The Victoria Centre has been at the heart of Nottingham for over 40 years and this acquisition further underlines our commitment to the city, which is one of the UK's top ranking retail destinations. We look forward to working with Nottingham City Council on this exciting opportunity.”
That may just be holding back an already familiar deck of cards. Or it could be an olive branch to a City Council which privately has considerable concerns about what CSC may – or may not – do. Or, it could be an indication that, now it’s got two centres, it will revise both plans.
Legal completion of the purchase hasn’t gone through yet, so I doubt we’ll hear a categorical statement of intent until then. CSC will also be discussing its options with the likes of Harvey Nichols, Marks & Spencer, Apple and Hollister, all of whom had agreements of varying status in relation to Westfield’s Broadmarsh redevelopment.
Either way, it’s time for CSC to start talking to Nottingham.
Wednesday, 16 November 2011
Broadmarsh battle isn't over yet
The Broadmarsh story isn’t over yet. There is one final twist in this tale which relates to the 25% shareholding in the long lease on the centre which Westfield didn’t own.
To recap, Westfield agreed to sell its controlling stake in the operation of the centre to Capital Shopping Centres, the owner of the Victoria Centre.
It was, if you like, a ‘knockout’ deal, one intended to overcome the commercial roadblock caused by both Westfield and CSC wanting to redevelop their centres at the same time.
It is thought – though not confirmed - that the prime movers in this deal were John Whittaker, the Lancashire billionaire whose property business, Peel Holdings, has the controlling stake in CSC, and Stephen Lowy, whose family empire owns Westfield.
You’d have thought that the minority shareholder in Broadmarsh would simply have to accept that the senior partner had done a game-changing deal.
But that’s not necessarily the case.
The 25% shareholder is the Royal Mail Pension Fund. And the terms of its shareholding are that it has pre-emption rights – in other words, it can table a counter offer for the 75% that Westfield has agreed in principle to sell to CSC.
In theory, it has 60 days in which to table a bid.
In practice, it will probably have to make up its mind within the next few days. That’s because CSC has also made an offer to buy its 25%.
We don’t know the terms of that offer, but it will almost certainly contain an ultimatum that unless it is taken up the offer will be withdrawn in less than the 60 days allowed to exercise the pre-emption right.
In other words, it’s an attempt to spike the guns of a counter-bid before anyone has the time to put one together.
This may seem uncompromising stuff, but that’s the way big corporates operate when the value of their business is at risk. No one on the stock exchange would bat an eyelid.
Nevertheless, there is emerging evidence that CSC is going to have to be mindful of the impact this deal has on the reception it gets in Nottingham.
There is considerable political disquiet at the way the sale deal was done – no one in Nottingham knew about it, and the first public confirmation was on the Sydney and London stock exchanges.
Phone calls to all the concerned parties were made last Wednesday evening, but by then the die had been cast.
Standard corporate practice though it was, this did not go down well in the city.
It is against that background that CSC may decide that it wants to go ahead with the expansion of the Victoria Centre and ditch the redevelopment of Broadmarsh.
It needs Nottingham City Council onside to do this. Yet the Victoria Centre was probably not their favoured scheme.
While the Broadmarsh design offered an open environment which cleaned up an eyesore right next to the site of the new transport hub, Victoria Centre’s plan envisages a large-scale – and architecturally dull – extension of an existing sealed mall. It’s making a big box bigger.
Worse in the eyes of city planners, it threatens a potentially significant increase in car-borne visitors in the home of what is arguably one of the best public transport systems in Britain.
Finally, sealed malls are all about keeping trade to yourself. Where would that leave the rest of the city centre around Nottingham’s iconic Market Square?
It is this spectre that is now occupying the minds of the city’s political leadership in a very big way. They see a fundamental part of Nottingham’s future apparently being determined not by elected politicians but by corporate Britain. Whether you think it’s fair or not, corporate Britain doesn’t have a great name right now.
Capital Shopping Centres may well succeed in knocking out potential commercial opposition.
That won’t necessarily translate into support from Nottingham.
One way or another, there will still have to be a plan for Broadmarsh.
To recap, Westfield agreed to sell its controlling stake in the operation of the centre to Capital Shopping Centres, the owner of the Victoria Centre.
It was, if you like, a ‘knockout’ deal, one intended to overcome the commercial roadblock caused by both Westfield and CSC wanting to redevelop their centres at the same time.
It is thought – though not confirmed - that the prime movers in this deal were John Whittaker, the Lancashire billionaire whose property business, Peel Holdings, has the controlling stake in CSC, and Stephen Lowy, whose family empire owns Westfield.
You’d have thought that the minority shareholder in Broadmarsh would simply have to accept that the senior partner had done a game-changing deal.
But that’s not necessarily the case.
The 25% shareholder is the Royal Mail Pension Fund. And the terms of its shareholding are that it has pre-emption rights – in other words, it can table a counter offer for the 75% that Westfield has agreed in principle to sell to CSC.
In theory, it has 60 days in which to table a bid.
In practice, it will probably have to make up its mind within the next few days. That’s because CSC has also made an offer to buy its 25%.
We don’t know the terms of that offer, but it will almost certainly contain an ultimatum that unless it is taken up the offer will be withdrawn in less than the 60 days allowed to exercise the pre-emption right.
In other words, it’s an attempt to spike the guns of a counter-bid before anyone has the time to put one together.
This may seem uncompromising stuff, but that’s the way big corporates operate when the value of their business is at risk. No one on the stock exchange would bat an eyelid.
Nevertheless, there is emerging evidence that CSC is going to have to be mindful of the impact this deal has on the reception it gets in Nottingham.
There is considerable political disquiet at the way the sale deal was done – no one in Nottingham knew about it, and the first public confirmation was on the Sydney and London stock exchanges.
Phone calls to all the concerned parties were made last Wednesday evening, but by then the die had been cast.
Standard corporate practice though it was, this did not go down well in the city.
It is against that background that CSC may decide that it wants to go ahead with the expansion of the Victoria Centre and ditch the redevelopment of Broadmarsh.
It needs Nottingham City Council onside to do this. Yet the Victoria Centre was probably not their favoured scheme.
While the Broadmarsh design offered an open environment which cleaned up an eyesore right next to the site of the new transport hub, Victoria Centre’s plan envisages a large-scale – and architecturally dull – extension of an existing sealed mall. It’s making a big box bigger.
Worse in the eyes of city planners, it threatens a potentially significant increase in car-borne visitors in the home of what is arguably one of the best public transport systems in Britain.
Finally, sealed malls are all about keeping trade to yourself. Where would that leave the rest of the city centre around Nottingham’s iconic Market Square?
It is this spectre that is now occupying the minds of the city’s political leadership in a very big way. They see a fundamental part of Nottingham’s future apparently being determined not by elected politicians but by corporate Britain. Whether you think it’s fair or not, corporate Britain doesn’t have a great name right now.
Capital Shopping Centres may well succeed in knocking out potential commercial opposition.
That won’t necessarily translate into support from Nottingham.
One way or another, there will still have to be a plan for Broadmarsh.
Friday, 11 November 2011
Westfield and CSC: This town wasn't big enough for the both of them
So, what are we to make of Westfield’s decision to walk away from Broadmarsh within sight of a much-vaunted £450m revamp?
I don’t think there’s any question that they’ve decided it would be an awful lot easier to make the numbers add up elsewhere – specifically in the south east, which simply isn’t experiencing anything like the downturn seen in the rest of the country.
In Nottingham, they waded through a complex land assembly and protracted planning, only to see the economic tide head back out.
But the signs are that Westfield may not have made the first move in this decision (though it was certainly wearying of a planning process which went on so long a rival appeared).
No one locally knew about this decision in advance. There is evidence, too, that Westfield’s own UK executives may not have been the first to find out, either. Senior figures here were still proceeding with this plan as recently as last week.
From Capital Shopping Centres, under whose name a statement confirming the intended £55m purchase of Broadmarsh was issued yesterday, we have heard nothing.
So who was the driving force behind this move?
One interpretation is that this has the stamp of a clear-sighted attempt to solve the fundamental dilemma facing both Westfield and Capital Shopping Centres: both were pitching the same set of high-profile retailers.
So only one scheme was going to succeed.
This would have affected the prospects – and therefore the value – of the losing side. The respective shareholders in Westfield and CSC would not have wanted that to happen. So there was a price to be negotiated, one determined by the present and future value of one centre and the impact its development might have on the value of the other.
It’s the kind of deal negotiated by people who know development lives on private profits not public plaudits. Pretty no-nonsense hard-heads, I’d guess.
The no-nonsense hard-heads behind this deal have solved their problem. Infact, they’ve handed the dilemma back to the city’s planners and politicians…whose measure of success is defined by the same criteria in reverse: plaudits not profits.
Nottingham City Council wanted the Broadmarsh revamp to go-ahead because it would rid the city of a series of shockingly decrepit 1960s eyesores which should have been levelled by a smartbomb 20 years ago.
Instead, we would have a new, expanded shopping centre featuring big-name retailers in eye-catching street scenes which spoke of an ambitious regional capital.
So one last deal is still to be done. It will determine whether Capital Shopping Centres expands the Victoria Centre and merely dusts a few cobwebs off Broadmarsh, or is persuaded that there is a way of making the Broadmarsh numbers add up in a way Westfield decided it couldn’t.
This will be a very tough negotiation for Nottingham City Council, a negotiation which will determine the way our city looks for perhaps 30 years ahead.
Whether in person or proxy, the man they will effectively be dealing with may well have been cutting a deal with someone in Sydney recently.
He is clearly a formidably determined character. And he now has Nottingham’s retail future in his hands.
I don’t think there’s any question that they’ve decided it would be an awful lot easier to make the numbers add up elsewhere – specifically in the south east, which simply isn’t experiencing anything like the downturn seen in the rest of the country.
In Nottingham, they waded through a complex land assembly and protracted planning, only to see the economic tide head back out.
But the signs are that Westfield may not have made the first move in this decision (though it was certainly wearying of a planning process which went on so long a rival appeared).
No one locally knew about this decision in advance. There is evidence, too, that Westfield’s own UK executives may not have been the first to find out, either. Senior figures here were still proceeding with this plan as recently as last week.
From Capital Shopping Centres, under whose name a statement confirming the intended £55m purchase of Broadmarsh was issued yesterday, we have heard nothing.
So who was the driving force behind this move?
One interpretation is that this has the stamp of a clear-sighted attempt to solve the fundamental dilemma facing both Westfield and Capital Shopping Centres: both were pitching the same set of high-profile retailers.
So only one scheme was going to succeed.
This would have affected the prospects – and therefore the value – of the losing side. The respective shareholders in Westfield and CSC would not have wanted that to happen. So there was a price to be negotiated, one determined by the present and future value of one centre and the impact its development might have on the value of the other.
It’s the kind of deal negotiated by people who know development lives on private profits not public plaudits. Pretty no-nonsense hard-heads, I’d guess.
The no-nonsense hard-heads behind this deal have solved their problem. Infact, they’ve handed the dilemma back to the city’s planners and politicians…whose measure of success is defined by the same criteria in reverse: plaudits not profits.
Nottingham City Council wanted the Broadmarsh revamp to go-ahead because it would rid the city of a series of shockingly decrepit 1960s eyesores which should have been levelled by a smartbomb 20 years ago.
Instead, we would have a new, expanded shopping centre featuring big-name retailers in eye-catching street scenes which spoke of an ambitious regional capital.
So one last deal is still to be done. It will determine whether Capital Shopping Centres expands the Victoria Centre and merely dusts a few cobwebs off Broadmarsh, or is persuaded that there is a way of making the Broadmarsh numbers add up in a way Westfield decided it couldn’t.
This will be a very tough negotiation for Nottingham City Council, a negotiation which will determine the way our city looks for perhaps 30 years ahead.
Whether in person or proxy, the man they will effectively be dealing with may well have been cutting a deal with someone in Sydney recently.
He is clearly a formidably determined character. And he now has Nottingham’s retail future in his hands.
Thursday, 10 November 2011
Westfield's Broadmarsh bombshell
It’s a bombshell announcement from Australia which will send ripples not just across Nottingham but the whole of the UK retail industry.
Westfield announced overnight that it has sold its controlling stake in the city’s Broadmarsh shopping centre. And it has sold it to the people who own the Victoria Centre.
The £55m deal will see the Australian shopping centre giant’s 75 per cent share in Broadmarsh taken over by Capital Shopping Centres.
The deal has huge implications for the future development of Nottingham city centre, and its status as one of the top retail destinations in the UK
Westfield was about to push the button on the first stages of the £450m redevelopment – one that Nottingham has been waiting for the best part of 20 years.
So why has it backed out when designs have been drawn up and negotiations with a raft of big retail names have reached an advanced stage?
The official line from Australia – and that’s where this announcement has come from, not London – is that it has taken a strategic decision to increase its focus on ‘larger, iconic centres’ like the giant mall it has developed next to the London 2012 Olympics site.
But the fact that it has sold to Capital Shopping Centres raises another question. CSC is also in the advanced stages of a £250m plan to massively increase the size of the Victoria Centre, and the consensus among property experts was that only one of these two schemes could succeed.
So has Westfield decided to cut a deal where it walks away with a premium on the book value and leaves the field in Nottingham open to one developer?
Either way, its decision to abandon Nottingham is hugely controversial. The city has lived with a weary retail relic for years, watching a previous redevelopment plan sink beneath the credit crunch.
After some difficult negotiations with the city council, Westfield then came forward with a new plan which would not only have redeveloped Broadmarsh but also have tidied up the southern gateway to the city centre, dovetailing neatly with plans to turn the railway station into a transport interchange.
So it was not just retail redevelopment, but tangible regeneration.
As I write, there is no statement from Capital Retail to say what their intentions with Broadmarsh are. But the city will be desperate to keep the idea of a southern gateway alive, and it has real concerns about a Victoria Centre extension which appears to tilt the retail centre of gravity away from the city centre and northwards.
There could be some political recrimination from this, too – has the city allowed a major opportunity to slip out of its grasp for a second time?
Let’s hope not. In terms of spend, Nottingham is still the fifth biggest retail destination outside London, and the interest of the likes of Harvey Nichols predates the current Broadmarsh plan.
Capital Shopping Centres hasn’t spent £55m buying out Westfield for nothing: one way or another, a big investment in Nottingham retail is still going to happen.
Westfield announced overnight that it has sold its controlling stake in the city’s Broadmarsh shopping centre. And it has sold it to the people who own the Victoria Centre.
The £55m deal will see the Australian shopping centre giant’s 75 per cent share in Broadmarsh taken over by Capital Shopping Centres.
The deal has huge implications for the future development of Nottingham city centre, and its status as one of the top retail destinations in the UK
Westfield was about to push the button on the first stages of the £450m redevelopment – one that Nottingham has been waiting for the best part of 20 years.
So why has it backed out when designs have been drawn up and negotiations with a raft of big retail names have reached an advanced stage?
The official line from Australia – and that’s where this announcement has come from, not London – is that it has taken a strategic decision to increase its focus on ‘larger, iconic centres’ like the giant mall it has developed next to the London 2012 Olympics site.
But the fact that it has sold to Capital Shopping Centres raises another question. CSC is also in the advanced stages of a £250m plan to massively increase the size of the Victoria Centre, and the consensus among property experts was that only one of these two schemes could succeed.
So has Westfield decided to cut a deal where it walks away with a premium on the book value and leaves the field in Nottingham open to one developer?
Either way, its decision to abandon Nottingham is hugely controversial. The city has lived with a weary retail relic for years, watching a previous redevelopment plan sink beneath the credit crunch.
After some difficult negotiations with the city council, Westfield then came forward with a new plan which would not only have redeveloped Broadmarsh but also have tidied up the southern gateway to the city centre, dovetailing neatly with plans to turn the railway station into a transport interchange.
So it was not just retail redevelopment, but tangible regeneration.
As I write, there is no statement from Capital Retail to say what their intentions with Broadmarsh are. But the city will be desperate to keep the idea of a southern gateway alive, and it has real concerns about a Victoria Centre extension which appears to tilt the retail centre of gravity away from the city centre and northwards.
There could be some political recrimination from this, too – has the city allowed a major opportunity to slip out of its grasp for a second time?
Let’s hope not. In terms of spend, Nottingham is still the fifth biggest retail destination outside London, and the interest of the likes of Harvey Nichols predates the current Broadmarsh plan.
Capital Shopping Centres hasn’t spent £55m buying out Westfield for nothing: one way or another, a big investment in Nottingham retail is still going to happen.
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