WESTFIELD'S WINDS OF CHANGE
May 1, 2004 12:00 PM, Brannon Boswell
Westfield America's top two executives aren't sweating over the influence of lifestyle centers on U.S. retail. In fact, they thumb their noses at the analysts and rival developers who say that malls are passé. “Lifestyle is a great name, but I call it infill retail,” says Vice Chairman Richard Green. “
Managing Director Peter Lowy agrees. “It's been one thing after another for the past 10 years,” he says. “First, it was the power centers that were going to kill the mall, then the Internet; then the big boxes, now we have the lifestyle center.”
Untroubled, Westfield is perfecting what it calls a “hi-style” mall format to snag the most in-demand retailers to please its shoppers. “Hi-style” combines the hybrid mall and lifestyle center concepts to create a shopping center that takes one-stop shopping seriously, with traditional mall retailers such as department stores and specialty shops alongside a lifestyle component with entertainment and restaurant venues. Supermarkets may even become part of the formula one day. Westfield is currently converting six or seven of its properties into “hi-style malls.”
At Westfield Shoppingtown Oakridge in San Jose, Calif., Target, a new cinema, Cheesecake Factory and Linens 'n Things are joining Macy's and Sears as tenants. And at Westfield Shoppingtown Parkway in suburban San Diego, a 160,000-square-foot, two-level Wal-Mart will open this fall, joining fellow anchors Borders, Best Buy, Robinsons-May and JCPenney. “We've needed a hard goods and a food component in malls for a long time,” Green says. “Target and Wal-Mart help fill the void. We have five Targets under construction and two or three more deals in the works. Our hope is to have them at every property.” Department store anchors are encouraging the trend. “This wouldn't be happening without the support of Federated and May,” he says.
The company's pipeline of acquisitions, developments and redevelopments will be supported by a new financial structure. In April, Westfield founder Frank Lowy said he plans to combine his three property companies and create the world's largest public owner of retail space. The restructuring, pending shareholder approval, would involve L.A.-based Westfield America Trust, London-based Westfield Trust and Sydney, Australia-based Westfield Holdings, Ltd. combining into one $25 billion entity called Westfield Group.
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