Peter Lowry, CEO of Westfield and Sir Philip Green of Arcadia shared the platform this morning for the opening of the Bank of America Merrill Lynch Real Estate Conference 2012. This much anticipated and attended session, in my mind, set the tone for another day in a retail market that is facing significant structural change.
Westfield’s success is in place making and the ability to provide a differentiated mixed use offer to compete in an increasingly competitive retail market; this was clearly laid out by Peter. Sir Philip was clear that as a retailer they would be investing more in fewer, better stores (Westfield Stratford being an example). Both sides played to the tune of continued polarisation.
The retailer session later in the morning touched upon portfolio optimisation and ‘cross border’ as opposed to ‘domestic’ expansion strategies and saw unanimous agreement from panellists (including our very own pan Euro retail specialist, James Dolphin) that retailer requirements have fundamentally changed. We heard about healthy demand for the ‘right space’ in the ‘right place’ but also about the tumble weed that is likely to enter some weaker secondary locations across Europe.
This discussion continues on from our Retail 2020 debate and will roll for some time. Rest assured, the retail and retail property market is changing at a rate we are not accustomed to, and imminent lease expiries will be the catalyst for much change. Until some of these leases expire however, it is simply a waiting game.