Westfield, the shopping centre owner, has cut the service charges at its Westfield London shopping centre following a campaign from unhappy retailers.
The 7% reduction at Westfield London equates to a revised top weighted rate for 2009 of £12.98/sq ft – compared to the original budget projection of £13.94/sq ft that was given to retailers around Christmas 2008.
Reductions have resulted from a wide variety of initiatives including a reduction in maintenance costs and streamlining of services.
Westfield said it had identified a total saving of £4.1m across its portfolio of shopping centres.
The outcome of the Westfield London review is a net reduction in charges to retailers of approximately £1.4m when compared to estimates provided around Christmas 2008.
It also said that during 2009 retailers would benefit from promotions costing in excess of £4.5m which had been fully supported by the joint owners of the 1.6m sq ft centre – Westfield and Commerz Real.
These initiatives include additional marketing and promotional activities which are ‘driving significant customer visitation to the centre including foreign and domestic tourism.’
The service charge review process was deferred at Westfield London until the centre had completed at least 6 months of trading. Westfield said this was to allow for a more accurate assessment of the true operating costs associated with the new centre.
Denis Carruthers, director of shopping centre management and marketing, 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 also reflects savings which do not make unacceptable compromises on the delivery of a good quality service to shoppers and retailers.’
‘The rate at Westfield London now compares favourably with other regional shopping centres in the southeast. In addition to the net reduction in service charge, the owners have made a significant additional contribution to the marketing and promotion of this flagship centre which has successfully positioned it as one of the top retail destinations in the country after only six months of trading with many stores performing in the top quartile of retailers’ portfolios.'