[PRO] Westfield Marion

[pushbutton]

It appears that all 3 Westfield developments in SA have been put on hold for the time being.

The TTP development was supposed to start in May 2008 but there's still no firm start date.

Marion was originally supposed to be 2008 as well but then was put off until after the West Lakes development, and there's still talk of that happening in mid 2009, but it won't be any earlier.

Disappointing but not at all unusual.

[Ben]

Westfiled is planning to upgrade Marion, in a $200 million expansion.

Construction is expected to start in 2009 and be completed by 2010.

The expansion is aimed at attracting high-end fashion to Marion.

As you can see from the very first post Marion was always expected to start mid - late 2009. West Lakes was always 2009/10.

None of these expensions are on hold.

[steveadl]

Obviously nothing official yet, but one thing that could potentially extend the time frames of upgrades is that in the current depressed LPT environment, Westfield will be on the look out for acquisitions - especially if they can get better return buying new assets as opposed to developing existing. General Growth in the US is in trouble, so they could look at picking up some of their assets.

Westfield Group said on Wednesday it would consider acquisitions of companies or assets that might be put up for sale.
"If you hold to the rules we've followed the last four or five years, if the markets keep going, then you'll get a feel for how we probably look at these things, and it could either be a company or a set of assets," joint managing director Steven Lowy told analysts on a webcast

[muzzamo]

Westfield know that the turning off of the 15 year home equity tap in Australia is going to be disastrous for retail spending...

[JamesXander]

Retail spending has already taken a big hit, considering its risen almost every year for over a decade.



Within my own company, sales are down about 5%.


This impacts on shopping centres in a huge way, the shops that were once only marginally viable, are no longer viable. And the shopping centre are no longer full. Have alook around your lcoal, you may notice that there are actually empty shops for a the first time. Its always the last few shops that are the profitable ones (if that makes sense...)



Almost youll probably start to notice the emergence of the temporary shop. where shopping centres offer the shop bare to rent at bottom prices, just to make a little bit of money and to make the centre look full.

[pushbutton]

Westfield are particularly skilled at keeping their centres fully leased and something tells me even in an economic downturn such as the current one they will probably still manage it quite well.

We might see 2 or 3 empty shops in any one centre at any one time, but then that's not unusual anyway due to regular turnaround of tenancies and relocations etc.
I very much doubt we'll see lots of empty shops.

[JamesXander]

No. Its already happening now. I work with a retail company. Shopping centres are literally offering rent for nothing.



Even Habourtown, which for years had 100% tenancy is no longer full. And indeed has 10 empty shops in its new extention.



I cant say much about Westfield as we arent in any. I've only heard stories that they only offer long leases and its very expensive.

[pushbutton]

It certainly is very expensive yes, no doubt about that!

Not sure of the exact figures but earlier this year someone told me how much they pay for a small kiosk in the middle of the mall, and I believe it was about $3000 rent per week, plus a percentage of their sales on top of that!

[JamesXander]

It certainly is very expensive yes, no doubt about that!

Not sure of the exact figures but earlier this year someone told me how much they pay for a small kiosk in the middle of the mall, and I believe it was about $3000 rent per month, plus a percentage of their sales on top of that!

A medium shop at habourtown is $90,000.



The thing with most centres however is that they have massive outgoings. I can only imagine how big the outgoings would be at a westfield. Then factor in their adversting fees. Its just massive.


You probably wont see the empty shops in Westfield for a couple of years though, as they sign long term contracts.

[pushbutton]

and why would we see empty shops in a couple of years from now then?

The point was that shops would supposedly be empty because of the current economic downturn, but that will be well and truly over by then!

[steveadl]

James,

- Westfield's Aussie portfolio is 99.5%+ leased - another way of saying fully leased, but you can't say 100% as techincally there will always be a shop or two changing over, refitting etc.

- Survival of the fittest stores. If a store isn't profitable enough to survive during a down turn, it will be replaced by one that is. Same with small operators - only stores that continually improve and grow over the years will survive amongst a growing environment of larger corporations and fracnhised outlets in the fight for prime retail space.

- Not all businesses are suffering during this "down turn" - yours is down 5%, mine is up 12%. The best wider market guage you can get (especially when we're talking about Westfield's) are their mall sales figures.

In the Sept quarter just gone: Majors up 4%, Specialties up 3.7%, Total up 3.9%

[AtD]

Actually retail turnover is growing reasonably well, in SA at least.

http://www.ausstats.abs.gov.au/ausstats ... 202008.pdf

It's up 9.3% on the same time last year (October to October), considerably stronger than all other states and territories except NT.

It'd be interesting to see what's happened since October though.

[Ben]

From The Messenger:

Westfield upgrade delayed

THE $280 million redevelopment of Westfield Marion has again been pushed back, with no start or completion date in sight against a background of the global financial crisis.

Westfield regional manager Malcolm Creswell has told the Guardian Messenger the project is still at the ``preliminary engineering stages’’.

``The Marion centre is just one centre that we are working on,’’ he said.

Westfield spokeswoman Julia Clarke said construction was ``unlikely’’ to begin in 2009, as originally planned, and she acknowledged the global crunch had contributed to the delay.

``Marion will begin its redevelopment phase when conditions are appropriate,’’ she said.

``At the moment Westfield has its focus on two projects - Sydney and London.

``Marion is on our list of strategic projects to be completed along with a range of others.’’

The redevelopment was granted Marion Council approval in August 2007 to expand the shopping precinct by 90 shops, creating 740 retail and 700 construction jobs.

At the time, another Westfield spokesman Robert Green told the Guardian Messenger that construction work would start in early 2009 with the entire project to be finished by Christmas 2010.

Marion Council CEO Mark Searle said he understood Westfield’s situation given the economic downturn.

``The council is aware that start dates and completion dates shift, and it is not unusual,’’ he said.

``Westfield’s commitment to the area has been very strong over a long period.’’

The intended upgrade will see a supermarket built next to Kmart on the first floor; a two-level mall linking the new supermarket to David Jones; a third deck added to the car park at the centre’s Morphett Rd side; and a three-level mezzanine car park will also be built along Diagonal Rd.

[peas_and_corn]

What supermarket is not already at Marion?

I hope this goes ahead rather than what happened to the TTP reno...

[Norman]

What supermarket is not already at Marion?

I hope this goes ahead rather than what happened to the TTP reno...

Foodland. Or maybe even Aldi!