Plans to regenerate the Stratford City site have been a long time coming and with the Olympics round the corner, Tim Danaher explains why the retail industry has confidence in the scheme
At any time, the opening of a 1.9 million sq ft shopping and leisure development is a major event. When it’s opening at a time when no one else is developing shopping centres, and when it’s going to be next door to the biggest sporting event ever seen in the UK, it assumes even greater magnitude.
The £1.45bn Westfield Stratford City is that scheme. And at a time when the mood, both in retailing and in the capital, is frankly in need of a boost, the arrival of so of many new stores in this formerly desolate corner of east London is cause for celebration.
For more than 20 years, plans have existed to develop a major shopping centre on the huge Stratford City site. For 150 years, the 700 acre site was a place where railway carriages were repaired and tickets printed – now its unrivalled connections to the rail network have played a key part in its regeneration.
Anchored by John Lewis, Marks & Spencer and Waitrose, and with 300 retailers also secured to open stores, the scheme will provide a fitting gateway to the Olympic Park. 70% of visitors to the games events in the park are expected to pass through the centre, and what they will see is an exposition of UK retailing at its best, as well as a scheme that is at the cutting edge when it comes to the use of technology in a shopping centre environment.
Large scale opportunity
Yet to get to this point has been a long journey. Westfield first became involved in the site in 2004 when it acquired 25% of the project as part of a portfolio deal also involving Chelsfield, Multiplex and the Reuben Brothers. At that point, admits Westfield project director John Burton, the big attraction was the White City site, which became Westfield London, which was also included in the deal.
That quickly changed, says Burton, as the scale of the opportunity at Strat- ford became clear. “You’ve got 4 million people within 45 minutes, with a spending power of £23bn, and that indi- cated that we had a great opportunity here. Many of the centres they shopped at were of limited scale, many of limited quality, and at a time when people were gradually shifting away from car-borne travel, the incredible transport connec- tions this site has were key.”
What wasn’t apparent early on was how the impetus to develop the scheme would accelerate dramatically when London was awarded the 2012 Olympics in 2005. “The fact is that the Games meant the timeframe became massively condensed,” says Burton. “In the six months after that they needed comfort from us that we would proceed with the scheme otherwise they’d have had to massively adjust their plans.”
No sooner though had Westfield con- firmed that it was going ahead than, as Burton puts it, “the chill winds of the global financial crisis were blowing”. At that point in time, although some retailers – notably John Lewis and Waitrose – had committed early to the scheme, there were many left still to commit. Westfield UK and Europe managing director Michael Gutman admits it took a “courageous decision” to press on.
A major benefit was the Westfield London effect. The scheme opened in October 2008, and for most of the retail- ers in the scheme it was an immediate success, which made letting the space at Stratford that much easier. “The stellar performance of retailers in Westfield London gave them confidence in Stratford,” says Burton.
Gutman says: “The commitment of John Lewis and M&S, the demographics, the phenomenal transport, the keenness of international retailers to go in…all those things have given the team confidence in the project.”
Demand has been particularly strong from the so-called MSUs – Major Space Users – such as Next, Topshop, River Island, Primark and Forever 21. Despite the scheme being 10% bigger than Westfield London, this type of space was sold out rapidly.
This summer’s riots have put the spotlight on London for the wrong rea- sons, although the area around Stratford was relatively unaffected. Gutman says he was shocked by the scenes, but adds that they don’t detract from the overall story. “It was a concerning period but we’ve got confidence London is getting over the issues. It is a collective responsibility.” And by creating 10,000 new jobs – at least 2,000 of them for local unemployed people – Westfield Stratford City will be playing its part in east London’s economic recovery.
Changing shopper behaviour
The Olympics will be 16 days when all eyes are on Stratford, and with its headquarters in Sydney, Westfield knows more than most what the likely impact of the Games will be. However, Gutman points out that “there hasn’t been an Olympics that has had a retail and leisure destination like Stratford City at its heart”, adding “it will complement the Olympic experience greatly”.
But you don’t build a £1.45bn development for three weeks alone. Stratford City is about changing how people in east London shop for the long term. “Fundamentally this is an investment decision based on the long- term catchment of East London,” Gutman says.
The masterplan for the whole of the Stratford site encompasses a massive total of 13 million sq ft of development. Retail and leisure accounts for just under 2 million sq ft of the space but, in addition, there will be a massive residential element, plus hotels and offices.
There hasn’t been a regeneration project like it before. But the backing from so many of the UK’s leading retail and leisure brands shows they share Westfield’s confidence that Stratford will break the mould when it comes to shopping in the capital.