Australian shopping centre owner Westfield is to reduce service charges by 7 per cent at its Westfield London shopping centre following a campaign from disgruntled retailers.
The reduction at Westfield London follows a long running spat with its retail tenants and equates to a revised top weighted rate for 2009 of £12.98 compared with the original budget projection of £13.94 given to retailers around Christmas 2008.
Westfield said it had identified a total saving of £4.1m across the UK portfolio of its shopping centres through a wide variety of initiatives including a reduction in maintenance costs and streamlining of services.
The outcome of the Westfield London review is a net reduction in charges to retailers of approximately £1.4m when compared to estimates provided at Christmas 2008.
Westfield also said that during 2009 retailers will benefit from promotions costing over £4.5m which has been fully supported by the centre’s joint owners, Westfield and Commerz Real.
The service charge review process was deferred at Westfield London until the centre had completed at least six months of trading. Westfield said this was to allow for a more accurate assessment of the true operating costs associated with the new centre.
Westfield’s director of shopping centre management and marketing Denis Carruthers said: “We have worked hard to identify a total net saving of £4.1m for 2009 across our UK portfolio. This saving should go directly to our retailers’ bottom lines and will assist them during this difficult economic period. The rate at Westfield London now compares favourably with other regional shopping centres in the southeast.”