World Views
When we think back to the traditional picture of the quintessential British town, we recall idyllic images of the butcher, baker, greengrocer and fishmonger. But “The Portas Review,” by retail expert Mary Portas, also known as Mary Queen of Shops, which was commissioned by U.K. Prime Minister David Cameron in May 2011, painted a very dismal future for the British high street.
It found that the number of shops in market towns and town centers has fallen by 25,000 since 2000, with up to 9,000 more expected to close in the next few years. At the same time, the number of shops and supermarkets in out-of-town retail parks has increased by 1,800.
U.K. consumers have followed the suit of our U.S. counterparts, and although we stand accused of sacrificing community for convenience, we are shopping away from the traditional high street because of the lure of hassle-free Internet shopping and the cleaner, safer and more attractive environment of retail and leisure parks and so-called lifestyle shopping centers.
With more and more money being spent online, the nature of the shopping trip has changed. We now live in an age where people will buy from the Internet unless you personalize their shopping or dining-out experience. People are increasingly guarded with their leisure time and expenditures, and who can blame them for not wanting to slog through busy traffic and pay large parking fees? When people do make a trip into town or to a retail park, they want an experience, not just a physical alternative to the Internet store.
Much to the disappointment of Portas, the changing shopping habits of the end user cannot be reversed, so retail-led developments around the globe are reinventing themselves, providing on-site food and beverage offerings and big-box facilities that include bowling, bingo, cinemas and nightclubs. Attaching such leisure anchors also helps to extend the trading day and keep customers there longer.
Gone are the days when dining was a footnote within a retail development; it’s now as vital as the retail stores themselves, with properly managed food and leisure offerings seen as fundamental to successful retail destinations. In addition, many larger stores now provide a restaurant or coffee shop on-premises, be it company run or outsourced through partnerships with food and beverage operators with similar values.
Savvy restaurant and cafe chains have taken full advantage of the reduced demand for space from retailers. Restaurant brands that 10 years ago were in their infancy are now large national brands with shareholders who have expectations for them to expand. They may not have considered locations within shopping centers back then, but now they are hotly sought after. They’re even taking smaller and smaller spaces because they’re becoming more efficient.
With the United States leading the way in this trend, Britain and Australia have quickly followed suit, and now Europe and the Middle East also are adopting this model. Leading the new frontier in retail and leisure development is Westfield Group, which has set the international benchmark in shopping center design and content. A Sydney-based company and the largest shopping center developer worldwide in terms of assets, Westfield’s global flagship center remains its Westfield Bondi Junction in Sydney, which includes offerings such as an 11-screen cinema, two theaters and a full-service gym. Valet parking, a service where shopping bags are stored and carried to cars, four levels of entertainment, bars and food, and an upscale hotel have established Bondi Junction as an after-dark destination as well as a leader in daytime trade.
With six centers now in the United Kingdom, almost 50 in Australia and New Zealand, and almost 30 in the United States, it’s exciting to see the company expand its incredibly successful shopping center model to continental Europe, with an opening planned for 2015 in Milan, Italy, to coincide with the World Expo there.
Westfield will invest $163.5 million in two stages to buy a 50- percent stake in the site, which it will develop with Italian firm Gruppo Stilo. They plan to start work on a 1.8- million-square-foot site adjacent to Milan’s nearest city airport later this year. This will surely leverage the capabilities Westfield has developed in the United Kingdom at Westfield London and more recently at Westfield Stratford City, close to the 2012 Olympic site.
Not too far away in Spain, our development leasing team has recently advised Eurofund Investments Zaragoza SL to consult on a $1.56 billion project, Puerto Venecia in Zaragoza, which is in the Aragon region of Spain. Puerto Venecia will be Europe’s largest retail and leisure destination, comprising 2.1 million square feet of fashion, sport, retail, dining, recreation and adventure activities. It is scheduled for completion later this year, making it the first lifestyle center of its kind for the country, as this type of shopping mall and leisure offer has never before been seen in a shopping environment in Spain. A retail park anchored by a nearly 366,000-square-foot IKEA, Spanish department store El Corte Inglés and a fashion mall will be fused with a lineup of restaurants and cafes, reflecting the latest dining trends to set the complex apart and provide one of the best opportunities for European operators who want to expand their brands.
South America is also moving in that direction with Westfield’s 50-percent investment in São Paulo, Brazil-based mall owner Almeida Junior Shopping Centers. Both the São Paulo and Milan projects come on the heels of Westfield’s plan to invest $612.5 million to develop the retail part of the World Trade Center in New York in a venture with the Port Authority of New York & New Jersey.
Not to be left behind, the Middle East and North Africa also have a dominant portfolio of shopping malls created through developers Majid Al Futtaim Properties. The United Arab Emirates’ largest shopping, leisure and entertainment destination opened its doors in April 2012, introducing integrated lifestyle concepts into growing communities across the region. Fujairah City Centre became the sixth strategic shopping mall in the United Arab Emirates for Majid Al Futtaim and the company’s 11th mall in the region. Its premium leisure experiences are currently unmatched by any other mall in the United Arab Emirates, and the company plans to open megamalls in Cairo; Beirut; and Damascus, Syria.
With research from the British Council of Shopping Centres showing that 70 percent of consumers view shopping as a leisure activity, creating the right mix of dining outlets, cinemas and other leisure offerings has never been so crucial for enhancing the customer experience.
The demand from international developers together with the growing body of operators who wish to be represented in all continents has led us at Davis Coffer Lyons to create a global restaurant consultancy service to advise developers from around the world on how to create a point of difference at their schemes using key international restaurant concepts. The right restaurants not only give consumers another reason to make the trip to do their shopping in-store rather than buying online, they make a development the place to be, not just a space to shop. After all, you may be able to shop on the Internet, but you can’t replicate a leisure experience like dining at a restaurant online.
Long may that last.