Westfield Milano: inauguration postponed to 2022

24 June, Linkedin

The maxi mall in Segrate was born from the joint venture between Unibail Rodamco (holding 75% of the capital) and Stilo Immobiliare Finanziaria of the Percassi Group. The inauguration, expected by the end of 2019, has now been postponed to 2022.

Source: Linkedin

Translator: Cristina Ambrosi

Westfield Milano. Europe’s biggest shopping centre will open in 2021

29 October, Milano Fanpage

So far, the biggest shopping centre in Italy was the one in Arese. But, as shopping centres are never too big, Milan decided to beat this record opening a new shopping centre twice as big as Arese. There will be 300 shops, 50 boutiques, 50 restaurants and 16 movie theatres. As the official website of the project reads, “The best of the Italian and international retail will be here, an actual village of luxury”. The centre will occupy a surface of over 200 thousand Sq m in Segrate, in the old customs area, and it will be called Westfield Milano. The opening won’t happen before 2021; the construction has started this year. A possible extension of the M4 metro line with destination Linate airport serving the shopping centre is not to be excluded.  Westfield Milano is estimated to receive at least 60 thousand visitors daily, nearly 22 million people in a year. The project was born from the joint venture between Unibail Rodamco Westfield, one the global leaders in the shopping centre sector holding 75% of the project, and Stilo Immobiliare Finanziaria, operating through Arcus Real Estate. The investment amounts to 1.4 billion euro. The shopping centre will create 17 thousand new jobs (although there is no information regarding the employment contract typology) in the commercial activities, and over 20 thousand in the construction activity.

The debate: “No more shopping centres.”

However, many have criticised the project. “Do we really need this?”, wondered the Five Star Movement guru Beppe Grillo in his website. “What’s the point of building another huge shopping centre, resulting in more concrete, territory consumption, waste of energy, pollution and traffic? All this to compel people to shop more, mainly for products they don’t need”, he wrote. “We don’t need new shopping centres. We’re submerged by products and garbage. What else do we have to buy? How much money do we have still to spend? How much more do we have to work to buy what commercials are constantly offering us?”. The matter is aligned with the proposal of the Minister of Labour Luigi Di Maio to close shops during weekends. “Once, we used to rest on Sundays. We used to spend time with family and friends. Now we go to the shopping centre, dealing with traffic and crowds. The shopping centre is a non-place where you end up spending more money than needed due to the endless array of products on offer. As a result, we’re compelled to work even more during the week to spend more money on Sundays”, as provocatively commented Paolo Ernani, who defines himself “a writer, a trainer, an energy consultant, a creator of innovative projects in the work and environments fields”.

Source: Milano Fanpage

Translator: Cristina Ambrosi

Westfield Milano is getting ready for the future mall 5.0

25 September, Mark Up

The works to build Westfield Milano (WM) will last about three years. The opening is expected by 2021. Westfield Milano is meant to be included in the “Shopping Centre 5.0” vision which was announced by Unibail-Rodamco (“Destination 2028”) anticipating the acquisition of Westfield. Diego Valazza, senior leasing manager for URW-Unibail-Rodamco-Westfield, confirms this vision: “WM is included in the biggest retail development pipeline in the world, for a total value of around 13 billion euro. Among the main objectives of the group, there is the focus on the best assets in the most dynamic cities worldwide, participating at the development and improvement of these cities and have a positive influence on people’s lives: how people live, work, connect, shop and entertain themselves. Therefore, it’s essential for us to anticipate the trend, in order to offer a unique experience. Innovation is our spine”.

There is still little information concerning the tenant mix, namely which brands will be present in one of the biggest and most modern shopping centres in Italy and in Europe. “There’s a significant demand from brands. We’ll disclose the agreements in the upcoming months, which will join those already signed with Galeries Lafayette, Coin and the Inditex group”.

What is the URW mission and how are you building the tenant/retail mix in Westfield Milano?

The mission of URW is to create unique destinations where people can meet, discover innovative concepts and connect, according to our project philosophy. This mission is shaped by the awareness that each project should be characterised depending on its context. In the case of Westfield Milano, I have to admit that it was easy to place ourselves in the capital of fashion, design and food.

The dimension of Westfield Milano (Gla of 185,000 Sq m, an actual “village” dedicated to luxury, over 300 shops, 50 restaurants and 10,000 parking places) allow us to adopt an innovative approach in the marketing activity. Our goal is to provide customers with a new experience based on fashion, food, entertainment, events, leisure, and other services dedicated to many tourists visiting Milan.  In Westfield Milano, the mix is evolving thanks to the ability to offer a complete experience of luxury and accessibility concerning fashion as well as entertainment, leisure and food.

For what concerns food, how the food court will be like?

Food&Beverage has always been one of the main pillars of our shopping centres. There will be at least four food courts in Milan to satisfy all the needs, including actual gourmet experiences. We look at our food court as an inclusive space, where people can relax and enjoy the best of the world cuisines.

Also in this case, the target is to normalise the capacity utilisation of the food court granting a quality service throughout the opening hours of the gallery.

In order to achieve that, we avail ourselves of an internal team of professionals specialised in the different matters concerning food& beverage.

What about entertainment?

In my opinion, the definition of entertainment is rather complex. In the case of Westfield Milano, we entered an agreement with Uci Cinemas to open a multiplex with 16 movie theatres, about 2,500 seats and last generation services. For URW, entertainment is an essential part, and our shopping centres all around the world are a demonstration of this. We offer the opportunity to experience first-hand concerts, movie premieres, and fashion shows. Artists like Justin Bieber, Lady Gaga, Taylor Swift, and John Legend performed in our galleries. Moreover, we’ve hosted the European premieres of the Marvel movies and even surf competitions.

How do you deal with facilities, especially innovative facilities?

One of the main principles of URW is sustainability, in the design as well as in the implementation phase. This translates into the development of supporting infrastructures and the promotion of sustainable mobility. In Milan, we’ve budgeted about 200 million euro for the connecting infrastructure. I want to stress that Milan is already taken as an example in Europe concerning this matter, just think about the many car and bike providers. Hence, our project couldn’t ignore this aspect. Concerning sustainable mobility, we must include the promotion of rail transport. Regarding the marketing activity, the so-called “Athleisure” and, more in general, wellness, will be present in the project in different shapes, in the retail as well as in the service points of view. For instance, we are planning a network of cycling lanes that will link Segrate with the surrounding towns close to the mall.

What will be the role of luxury retailing?

Luxury retailing is one of the main innovations of Westfield Milano. Our view is the creation of a luxury village which will accommodate about 50 boutiques representing the most iconic global fashion and luxury brands.

What will be the impact of the national and international brands?

Our strategy is inspired by a “Glocal” approach where the commercial offer is strongly based on international brands, but it’s enriched by a more local/domestic component. Being in Milan places us in an advantageous position from an entrepreneurial point of view, and we’d like to contribute to the economic and social development of the territory.

Source: Mark Up

Translator: Cristina Ambrosi

Unibail-Rodamco-Westfield, the new shopping centre multinational

11 June, Fashion Network

“We’re excited to write together a new chapter of our story. The group is now in the ideal position to generate additional value and develop projects internationally”, commented Christophe Cuvillier, Ceo of the group.

Unibail-Rodamco-Westfield has a portfolio valued 62 billion euro. Its business is 88% focused on retail, 7% on offices and 6% in conference and exhibition organisation.

With approximately 3,700 professionals, the newly-born company owns and manages 102 shopping centres in 13 countries and two continents, receiving about 1.2 billion visitors every year. Moreover, the group has the biggest development plan in the industry with a value of 13 billion euro.

In Italy, Westfield is known for the project Westfield Milano, the joint venture between Westfield Corp and Stilo Immobiliare Finanziaria, operating through Arcus Real Estate. The shopping centre is scheduled to open by the second part of 2021, and it will develop over a total surface of 185,000 Sq m near the Milan Linate airport, east of the city.

Source: Fashion Network

Translator: Cristina Ambrosi

 

Italy is the country of big malls

31 May, Milano Finanza

A market sandwiched between e-commerce and discount. The Italian mass retail navigates rough waters due to the web and the low prices. Despite this, the country continues to register new openings of shopping centres, especially in the disused industrial areas of the province. A bargain or a hazard?

The third edition of the Mapic Italy has portrayed the situation of shopping malls in Italy. The event was dedicated to the international retail property market, and it saw the participation of the leading developers of commercial and retail projects, like Westfield, Ece, Eurocommercial, Igd, Svicom, Sonae Sierra and Klepierre. During the event, it was agreed that the sector is anything but in crisis. Let’s start with the numbers. In Italy, according to the report by the American real estate consulting company JLL, there will be 43 new projects by 2021, for a total surface of 1 million and 300 thousand Sq m. One-third of such projects, corresponding to 16 new shopping centre, is already under construction. The new openings are concentrated in Milan (70%). Over 60 brands chose to open a new store or to enter the Italian market in the last 12 months. During this period, there have been constructions for a total surface of 230 thousand Sq m concerning six new openings and four extensions.

Therefore, the Italian market is very dynamic, and it attracts investments especially for the biggest projects, such as Westfield in Milan, Caselle Open Mall in Turin, Auchan Cinisello, Parma Urban District and Cascina Merlata, always in Milan. Westfield in Milan will be the biggest shopping centre in Europe: 185 thousand Sq m are under construction in Segrate. It will be ready by 2020. The centre will accommodate 300 shops and a luxury district with 50 Italian and international brands, 50 restaurants, a multiplex with 16 theatres, plus a wide offer on digital technology, shopping and tourism. The project follows the concept of the shopping centre as a social and leisure place, besides a place for shopping. The trend is aligned with the choices of the consumers: according to the latest figures from Cncc (the national committee for shopping centres) referred to the last quarter of 2017, the sales per Sq m have decreased over the last 12 months. The sharpest decreases in shopping centres have been registered in shops of medium (from 601 to 1,500 Sq m) and big (over 1,500 Sq m) dimensions and in the consumer electronics and clothing sectors. “For what concerns total consumptions, Oxford Economics reported a 2.5% yearly increase. Interestingly, clothes and shoe shops have grown by 1.7% and catering by 2.8%”, reads the JLL report.

In case there was still need for confirmations, the figures show that investments have doubled at the beginning of the year in comparison with the same period of 2017, currently amounting to 780 million. Since the beginning of the year, there have been three operations in the high street segment, plus a deal on portfolios of two properties in Milan and Rome that has led the trend. The first months of 2018 reported eight out of town transactions concerning properties mostly in southern Italy, precisely in Bari, Brindisi, Taranto, Naples and Siracusa.

The figures regarding Italian mass retail show a similar situation: no signs of crisis, rather a revolution of the way of consuming. According to the recent report by Mediobanca, the online food shopping has grown (+35% on a yearly basis), even though it represents a marginal part of the total sales: 2.1% for the market leader Esseunga, 0.03% for Coop Alleanza 3.0.

Mediobanca has also published a chart of the leading companies operating in mass retail in terms of turnover: Coop and Conad are first with 12.4 billion, Selex is third with 10.3 billion, followed by Esselunga with 7.5 billion, Carrefour (4.9 billion) and Eurospin (4.7 billion). Discounts also figure in the top ten: Lidl Italia (4 billion), Iper-Unes (2,6 billion) and Pam (2.3 billion). Discounts have the highest growth rate indeed: Lidl registered a 46.2% increase, Eurospin34.1%, while the aggregate average for the mass retail sector representing 72% of the national market has reported a 7.9% growth.

Source: Milano Finanza

Translator: Cristina Ambrosi

 

16 new shopping centres in Italy by 2021

24 May, Il Sole 24 Ore

The future of retail depends on high-street and shopping centres. Besides, the consumption behaviours are more and more capable of influencing the trends and the products on offer thanks to e-commerce.

Yesterday there was the opening of the third edition of Mapic Italy along with the first edition Mapic Food & Beverage to discuss the situation of the segment. The event, organised by Reed Midem, sees the participation in Milan of 1,600 people from 35 countries, 600 of which are retailers. Among the key players of the sector, there are Westfield, Ece, Eurocommercial, Igd, Svicom, Sonae Sierra and Klepierre.

Today’s agenda will open with a roundtable organised by Cncc on the current situation and the perspectives of Italian commercial real estate.

“The picture is very positive in terms of development, with openings for 350 thousand Sq m Gla last year and just as many planned for this year”, comments Massimo Moretti, Cncc president, the main partner of Mapic Italy. According to the figures provided by Cncc regarding 2017, the sector combines decreasing sales for shopping centres with a keen interest in investing by Italian and international players. Also, there is the desire of the owners to sell in order to rotate their portfolios.

“The sharpest decreased have mainly concerned shops of medium dimensions (from 601 to 1,500 Sq m) as well as big ones (over 1,500 Sq m) – states the JLL report – Consumer electronics and clothing registered the biggest drops in values. Whereas catering and services reported good performances”. For this reason, many shopping centres have converted to food.

Nowadays, shopping centres have to comply with the modern standards. Thus many Italian shopping centres need a requalification.

Alessandro Mazzanti retaliates that shopping centres need to evolve “since they’re still an important meeting point – he says. The challenge is adapting the offer to the consumers’ needs” and using technology to “enhance the shopping experience”.

“Generally speaking, in Europe – says Pierre Marin, head of JLL Italy – shopping centres attracted 50% of the investments in retail for the first three months of 2018. Italy represented from 2008 to 2017 only 4% of the European market, but this figure is growing. In the first quarter of 2018, Italy weighted for 6.5% on the total”. What about the future? By the end of 2021, there are plans for over 1,300,000 Sp m, 33% of which are already under construction and concern 16 projects. However, there are 43 projects in the pipeline, nine of which in the south. Among the main ones, there are Westfield near Milan and Caselle Open Mall in Turin, followed by Cascina Merlata in Turin.

According to the data processed by JLL since the beginning of the year, about 780 million euro were invested in the retail sector, more than the double if compared with the same period of the previous year. The eight “out of town” transactions in the first three months of 2018 concerned single assets or deals on real estate portfolios for properties located in southern Italy (Bari, Brindisi, Taranto, Naples and Siracusa). “The retail sector registered in 2017 investments for about 2.2 billion, decreasing by 23% in comparison with last year. In the meanwhile, the number of transactions reported an increase of 3% compared with 2016”, concludes Marin.

The returns for prime shopping centres were stable, while those for secondary ones increased (by 7%  at the end of 2017 to the current 7.40%). However, the outlook for the current year is positive. By the end of the year, there will be new spaces for over 150,000 Sq m referring to 11 projects and returns are expected to settle on the values reached in the first part of the year.

“Sales don’t represent a risk for shopping centres, but they’re significantly transforming the consumers’ behaviour – comments Joachim Sandberg, head of Italy and Southern Europe Region for Cushman & Wakefield -. Therefore, shopping centres will have to adapt to this change to continue making profits. Online sales do not exclude offline sales, they’re rather complementary, and the shops that will be able to come out with sales strategies combining both channels will have a competitive advantage”.

Source: Il Sole 24 Ore

Translator: Cristina Ambrosi

Milan, luxury shops don’t fear the web

15 March, Corriere della Sera

They don’t give high returns, less than 3%, but they’re the most desirable commercial properties for big investors. They’re the high street shops in the big cities such as Milan, with Quadrilatero and Corso Vittorio Emanuele.

Last year the transactions for showrooms in the high streets exceeded those for shopping centres and retail parks: of little less than 2.5 billion investments, almost 1.4 have been invested in high street, while investments for shopping centres have been 750 million and retail parks 250 million.

The stabilization

This trend seems to be stable for other two reasons. Firstly, the high street sector is very little impacted by the economic situation (even in the worst times of the recession, Via Montenapoleone was crowded with wealthy foreigners), while the earnings of shopping centres are closely related to the economic trends. Secondly, the products sold in high streets are generally not available online, while shopping centres have to compete with e-commerce.

Shops in Milan are keeping their real estate value. In fact, comparing the average selling prices of three years ago and the current price, we can note the values are positive (starting from Montenapoleone with +20% and Corso Vittorio Emanuele with +9%) during a period that saw the values of the other property types reducing.

According to Reag (Duff & Phelps), the most significant transactions in the city recently concluded are the sale of the Diesel flagship store in Piazza San Babila for 93 million (bought by Drc Capital), as well as the sale to Amundi of a mixed-use property which includes the Disquared and La Martina shops in Via Verri 4, for 92 million euro. Other mixed-use properties have been sold by Zunino to Castello in Via Biglia and Via Bagutta for 128 million euro. This doesn’t mean that the era of shopping centre is over. After the inauguration of City Life last year, the biggest shopping centre in the centre of a provincial capital in Italy, there are other two important initiatives coming up.

The areas

The first initiative concerns Cascina Merlata, north of Milan, where 192 shops will rise on a surface of 65 thousand Sqm. The project is included in the requalification plan of Expo 2015, where the Human Technopole will also rise. The second project has even bigger dimensions: 185 thousand Sq m, 1.4 billion invested, 380 shops. It’s the Westfield in Segrate which will open in 2020 (the project has been delayed by three years). Following the model of the shopping centre already opened in London, it will be a mecca for luxury and leisure, bringing in Italy for the first time Le Galeries Lafayette, aiming ambitiously at bringing the showrooms of fashion brands in a shopping arcade.

Source: Corriere della Sera

Translator: Cristina Ambrosi

The Westfield hand over

13 December, Il Sole 24 Ore

The management of the new retail giant will be European. The French Unibail-Rodamco has made an agreement with the Australian company Westfield. The real estate investment company will pay 15.7 billion Australian dollars (about 10.1 billion euro as per yesterday’s exchange rate) to acquire Westfield which currently owns 35 shopping centres in the United State and Great Britain. Once the operation will be concluded, the Unibail-Rodamco shareholders will control 72% of the company originated by the merger of the two groups and that will amount to a market value of 61.1 billion euro. The partnership is expected to generate 100 million yearly. The total real estate assets of the new group will amount to 62.1 billion euro and will be composed of 104 shopping centres, including the new World Trade Center designed by Calatrava in New York. Westfield is known in Italy for Westfield Milan, the project for the mega-mall created by the partnership with the Percassi group from Segrate. The works for this mega-mall should start next year and will be finished by the end of 2020 with a total investment of 1.4 billion.

Source: Milano Finanza

Translator: Cristina Ambrosi

Italy at low shopping density

19 October, Il Sole 24 Ore

Consumptions are not recovering due to the economic crisis not definitely over and the increasingly harsher competition, these are the two factors that shopping centres have to face in this last part of 2017.

With these conditions, is still worth building new shopping centres? In Italy, 25 new shopping centres and retail parks are coming up and there are six big requalification projects of existing shopping centres under construction or in the process to be started.

If the new is advancing the old has to adjust and find new ideas to attract 4-6 million people that everyday visit shopping centres. There are shopping centres in Italy that can attract 10-14 million people throughout a year, with a dynamic offer that changes according to consumers’ needs.

The debate regards the opening of new shopping centres while the old ones have closed, and some others have proved to not be up to date with the current standards. To be honest, the density of shopping centres in Italy is lower than the European average and even lower than that registered in the United States. According to the figures for the first semester of 2017, across the country, there are 208 thousand Sq m every one thousands of citizens (for shopping centres above 10 thousand Sq m), in France 212 Sq m, in Spain 310 Sq m, in Uk 254 Sq m, in Portugal 274 Sq m. These values are higher in Northern Europe with 341 Sq m in Ireland, 377 in Finland, till the record of Estonia with 570 Sq m. By the end of the year, other 125 thousand Sq m Gla will come to Italy.

There have been few closures, that the experts of the industry call physiological. In some cases, it was due to the wrong location, in some others it was due structural problems such as limited accessibility, in others, the catchment area turned out to be scarce. It’s true, however, that there are many minor shopping centres that are suffering.

Among the operations coming soon, there is the one concerning the shopping centre in Antegnate (Bergamo) that was included in the portfolio of the fund Immoselect of Axa, the portfolio was acquired at the time by Blackstone that excluded though Antegnate. According to rumours, the asset received very low offers from investors that may reconvert the structure.

The shopping centre Le Acciaierie in Cortenuova also closed in 2014 and it struggles to find a new function. Some other centres of smaller dimensions closed as well.

The experts of the industry stress how today the focus is rather in the requalification and the reorganization of the existing properties or, even in the case of new openings, the recovery of existing structures already built, or abandoned factories, and so on. Therefore, those suffering the most are the shopping centres that have to compete with new and innovative centres. This is true for the structures that have to compete with Il Centro di Arese or those close to Westfield when this will open. Westfield itself will be a problem also for the major shopping centres.

Source: Il Sole 24 Ore

Translator: Cristina Ambrosi

Segrate, after the halt, the Australian giant launches the works for the mall

17 October, Corriere della Sera

The first milestone in 2018 and inauguration by 2020. Even reduced by one-third, it’s still one of the biggest malls in Europe

Its spaces have been reduced by almost one-third, but it’s still huge, and with a delay of three years on the initial schedule, the works have eventually started. In the next days, the Australian giant Westfield, together with the Percassi family, will officially request the authorization to build in Segrate, in the former Customs area, one of the biggest shopping centres in Europe. The first milestone is expected for the beginning of 2018, the opening is scheduled by the end of 2020.

Westfield has chosen Milan (and not Paris or London) to launch its shopping flagship and the numbers are impressive: a 1.4 billion investment and 10 thousand external parking spaces with a forecast of 25 million visitors per year and over 1.3 billion turnover. The commercial surface, which originally was meant to be 235 thousand Sq m, has been downsized to 185 thousand but it’s still huge. The area will accommodate 380 shops among which Galeries Lafayette, a French icon at its debut in Italy. There is then in the plan of an actual boutique district with Gucci and Armani among the names. Moreover, three food courts with fifty restaurants, a Uci multiplex with 15 cinemas, squares for events and choreographies that will change every season. According to the plan, the shopping centre will employ 17 thousand people (44 thousand if we consider the construction workers).

We’re far from the model of shopping mall that is in crisis in America, challenged by mobile shopping. The idea here is to create a “city within the city” dedicated to free time, more than to shopping. Let’s consider the restaurants: once they used to occupy no more than 5% of the surface, in Segrate, they may reach 15%. While the part concerning entertainment and services is still to be strengthened. The possibilities are plenty, from playground areas for children, gyms, and concert venues. It’s a fact that Milan and its hinterland seem to be a better choice than Rome or Florence for big-sized shopping centres: investment funds are betting on the recovery of consumptions and are ready to allocate capitals, also because the city has one of the highest per capita expenditure rates in Europe. But there must be all the conditions for a safe project, especially for what concerns infrastructures.

In the case of Segrate, for instance, the initial draft is dated back to 2009, Two years after, the agreement between Westfield and the Percassi group was signed. Since then, everything stopped.

One of the main reasons for the stop was the 6 kilometres Cassanese-Brebemi bypass that got stuck, with 200 million planning fees for the works pertaining to both Milano Serravalle and Westfield. The viability works for the hub are stuck at the moment, even though it’s not known when the project will be finished. The real estate project may start, then. But it relies on another uncertain infrastructure project: the M4, to which, in a couple of years, the shopping centre should be connected.

Source: Il Corriere della Sera (by Elisabetta Andreis)

Translator: Cristina Ambrosi