Advertise with us
[June 26, 2014]
City's retail moves Intu a brave new world ; When Westfield put its Derby shopping centre up for sale it created a ripple of uncertainty throughout... [Derby Evening Telegraph (England)]
(Derby Evening Telegraph (England) Via Acquire Media NewsEdge) City's retail moves Intu a brave new world ; When Westfield put its Derby shopping centre up for sale it created a ripple of uncertainty throughout the city. Less than six months later, it was snapped up for Pounds 390 million by property group Intu. Robin Johnson looks back at Westfield's legacy and profiles the shopping centre's new owner.
October 9, 2007 could be seen as the day when Derby's retail scene changed forever. It was the day that the city got a brand spanking new shopping centre - a place that would finally take Derby into the big league in terms of its retail of fering.
Onthat opening day, amidst the pomp and ceremony, there appeared to be a common view shared among those who had lived and shopped in Derby all their lives. It was a sense that Derby really had changed up a gear, that the Westfield Derby shopping centre was the first tangible evidence that the "new Derby", which had been talked about for so long by regeneration specialists, was finally being delivered.
The amount Westfield had invested to create the centre was unprecedented. The Australian company had spent Pounds 340 million to transformthe rather tired Eagle Centre and frankly embarrassing Main Centre into a shopping venue that could rival the likes of Sheffield's Meadowhall. Overall, it was an impressive statement of D e r by 's intent.
Depending on which way you look at it, the timing ofWestfield Derby was both good and bad. As Derby's great and the good gathered to celebrate the opening of the centre, none of them could have predicted that a year later the country would be in the grip of a recession.
But some believe Derby was lucky. It is likely that Westfield would have ..P4 8 shelved its Derby plans if it had known a recession was going to happen. By the time the impact of the global impact had reached the city, Westfield Derby was up and running, full of shops and hundreds of newly employed people.
And as consumers tightened their belts, it at least gave Derby a fighting chance of competing with Sheffield, Nottingham and Leicester and winning their custom.
But the coming of Westfield was not all good news for the city, at least not for those retailers trading elsewhere in Derby. Its opening appeared to tip the city's retail axis. Westfield became the newheart of Derby's retail scene, and traditional shopping areas in the older parts of the city centre found themselves on the fringes. Footfall appeared to be diverted away fromthem and they began to suffer.
Independent retailers in what are now known as the Cathedral Quarter and St Peters Quarter struggled and some went under. It was not surprising. The city's retail scene had undergone a massive sea change. While Derby welcomed many newretailers in Westfield, it lost a fewestablished ones outside the centre.
Some collateral damage was to be expected but many believe that if Westfield had not invested in the city, Derby would today be all the poorer.
Happily, over the past seven years, the Cathedral Quarter in particular has shown signs of recovery, playing on its strengths such as its independence, its individuality, its difference, its heritage, its aesthetics and its emphasis on highquality retailers.
Its "business improvement district" status has helped galvanise its businesses to produce an identity that shoppers are nowfamiliar with and are flocking back to. The St Peters Quarter is in the process of doing the same, proving that independent retailers can survive alongside a shiny, big shopping centre.
Whatever you think about Westfield Derby - and however you feel about shopping in there - there is no denying that the centre has given Derby a massive economic shot in the arm.
It is onlywhen you realise something might be in jeopardy that you realise its value. There was never any question that Westfield Derby would close but in November last year, eyebrows were certainly raised when Westfield announced its intention to sell the centre.
We s t f i e l d 's relationship with Derby actually started in 1998, when the company bought a stake in the old Eagle Centre. It ..P51 Story behind the brand The origins of Intu Properties dates back to 1980 when Sir Donald Gordon established the company under the name of Transatlantic Insurance Holdings.
A British firm, the company developed into a leading investor in life assurance businesses during the 1980s.
In the early 1990s, Transatlantic merged with Capital and Counties, a leading shopping centre developer. In 1996, it changed its name to Liberty International. Then, after demerging Capital and Counties in 2010, it renamed itself Capital Shopping Centres (CSC) Group.
In 2010, CSC bought the Trafford Centre, in Manchester and the following year bought Westfield's 75% stake in the Broadmarsh centre, in Nottingham.
In January last year, CSC announced its rebranding to Intu and the renaming of 12 shopping centres it owned to incoporate that name. A new orange and black brand identity was introduced, including a bird logo said to represent a "symbol of joy".
Today, including the Derby centre, the company owns or part-owns 16 shopping centres in the UK and employs more than 2,000 people.
INTU DERBY BY NUMBERS 1,299,500 Total amount of retail, catering and leisure space in square feet 170 Number of retail units 25,000,000 Annual footfall 1hr 22m Average dwell time 554,000 Catchment population Takeover could be key to further development Business leaders believe the sale of Westfield Derby shopping centre to Intu could help breathe new life into the city's retail scene.
One issue that could be resolved from the sale of Westfield Derby is the fate of the former Debenhams store in Victoria Street.
When Westfield received permission to double the size of the old Eagle Centre it agreed a deal with Derby City Council to buy the store.
The store is seen as key to the regeneration of the retail scene in the Cathedral Quarter and St Peters Quarter but, over the years, Westfield resisted selling the property.
The Debenhams store was included in the deal with Intu, which has raised hopes that the building could finally be freed up for redevelopment.
Russell Rigby, of Derby commercial property specialists Rigby and Co, said: "Several people tried to buy it but, for various reasons, a deal never materialised. I'm very confident that Intu will have their eyes wide open to the realistic promise and potential of the Debenhams store." Martin Langsdale, chairman of the Cathedral Quarter Management Group, said: "The future of the Debenhams store has a particular impact on the footfall in the neighbouring Cathedral Quarter and I'm confident that, alongside St Peters Quarter, we can put this issue firmly back on the agenda and see some real progress in future plans for this important site." Stephen Jeffery, board chairman of St Peters Quarter Business Improvement District, said: "We plan to pick up the discussions that we have had for some time with Westfield about the future of these properties and hope that matters will now progress more positively." Intu's chief operating officer, Mike Butterworth, said: "We will be looking to work with Derby City Council and other partners to decide the best way forward for this building." Any kind of regeneration would be a welcome boost to retailers in this area of Derby, particularly those in Green Lane, who have gone through a hard time in recent years.
While the city and Intu discuss the fate of the Debenhams store, work will be done to spruce up the existing shop frontages in Green Lane and neighbouring streets through the Pounds 2 million Townscape Heritage Initiative.
The five-year scheme will offer grant aid of up to 80% to the owners of eligible buildings to comprehensively restore them and improve their appearance.
It has been made possible thanks to Pounds 700,000 from the Heritage Lottery Fund and Pounds 291,500 from Derby City Council's Regeneration Fund.
It is expected that these sums will be matched by at least Pounds 900,000 from private owners taking up the grants.
Stephen Jeffery, chairman of St Peters Quarter Board, said: "St Peters Quarter BID has worked proactively with Derby City Council to demonstrate the businesses' appetite for such a scheme in this area. The Townscape Heritage Initiative will be a major factor in the overall work to regenerate the professional and independent area within St Peters Quarter, especially around the Green Lane area.
"This work, in addition to the refurbishment already underway at St Peter's Cross and then the regeneration of the Spot, will significantly improve the visitor experience to St Peters Quarter and, alongside the exciting work by the BID, will hopefully encourage more and more people back into this area - for the good of all the businesses here." ..P52 then embarked on a Pounds 12.8 million refurbishment programme - the first major investment the shopping centre had seen since it had been completed in the mid-1970s.
The Australian firm saw potential in the city and, after years of planning, work on the Pounds 340 million extension to the centre began in 2005. The investment effectively doubled the size of the shopping centre.
The new centre comprised 1.3 million square feet of space, with more than 180 shops over two levels and a 12-screen cinema.Today, it is home to big names Marks & Spencer, Debenhams, Sainsbu r y 's and Cinema De Lux and attracts 25 million people a year.
The question on the lips of city leaders back in November was: why Westfield had decided to sell such a successful shopping centre? The reason lay in a change of strategy. It wanted to free up capital to focus investment in centres in major capital cities. Selling off centres like Westfield would generate that cash. An asking price of around Pounds 400 million was slapped on the Derby centre - a price which would mean there would be a very small number of potential buyers.
A name that started to emerge was Intu Properties. An experienced shopping centre operator, it already had a large portfolio of centres, including the likes of The Potteries centre in Stoke and the Victoria and Broadmarsh centres in Nottingham.
Speculation circulated around the city about various groups of men in suits walking through the centre, inspecting the Derby centre.
Then, in March, Westfield announced that it had struck a deal to sell the centre to Intu for Pounds 390 million. It was part of a Pounds 867.8 million deal, which also included the takeover of Sprucefield retail park in Northern Ireland and a 50% stake in the Merry Hill Shopping Centre, near Dudley. At the time, Intu chief executive David Fischel described the deal as "a rare and attractive opportunity to acquire a further two prime shopping centres in line with our strategy to focus on the UK's largest and most successful destinations. " Following the exchange of contracts, a few more weeks passed for the paperwork to be done and the deal to be completed. Now that it has, the centre will embark on a new future under new ownership.
So, what changes can we expect? Perhaps the most obvious one is a change of name. Clearly, the centre could not continue to trade as Westfield Derby following its sale to Intu.
This inevitably led to speculation over what name the new owners would choose. It is something that the bosses at Intu did not chew over for long. The new name for Westfield Derby would be Intu Derby. A bit unimaginative some would say but Intu's chief operating officer, Mike Butterworth, explained the reasons why.
"Our intention was always to rename the centre Intu Derby, in line with what we have done at other centres in our portfolio," he said.
Mr Butterworth said he was excited by Intu's new acquisition and said that shoppers could expect some changes for the better. He said: "Westfield Derby is an excellent shopping centre. In some ways, it was a little unlucky in terms of the timing of when it first opened in 2007 -just before the downturn struck. It struggled a little through the recession but came through.
"Now that the economy is improving we believe the timing of this acquisition is right. I believe there are ways of improving the centre further by filling up the units and perhaps rejigging the catering offer." John Forkin, managing director of Marketing Derby, said: "Westfield was a very important investor into Derby, building the region's busiest and largest shopping centre, creating 3,000 jobs but new ownership brings with it fresh opportunities - and a fresh set of eyes." (c) 2014 ProQuest Information and Learning Company; All Rights Reserved.
Back To NFVZone's Homepage