Unibail-Rodamco SE chief executive officer Christophe Cuvillier says shopping malls must evolve to counter the threat of online retailers such as Amazon.com Inc, amid his company’s A$21bn ($17bn) bid to buy Australia’s Westfield Corp.
Europe’s largest commercial landlord plans to double the area for dining in its centres to 10%, while allocating more space for cosmetics outlets and electric vehicle manufacturer Tesla Inc, Cuvillier said in an interview in Melbourne yesterday. The Paris-based company also aims to rotate about 10% of tenants at each of its malls annually, he said.
“We are convinced the future of retail is not Internet only, it’s Internet and physical retail,” Cuvillier said, giving the example of Amazon opening a book store in a Westfield mall in New Jersey. “But the mix needs to evolve, the number of stores will evolve and the composition will change. They become living centres rather than just shopping centres, as long as they get the right investment, the right tenant rotation and the right events.”
Unibail-Rodamco in December agreed to buy Westfield, founded by billionaire Frank Lowy, for a mix of cash and stock to add a portfolio of 35 malls in the US and UK to its European centres. The agreement came amid declining store sales globally and as pressure from online commerce pushed mall operators to merge. Shares in Unibail-Rodamco have declined about 10% this year, eroding the valuation of the transaction.
Cuvillier, who is in Australia to brief Westfield investors on the deal and Unibail-Rodamco’s business, said the price is “full and fair,” and suits the interests of both boards. The deal must be approved by about two-thirds of the French company’s investors and 75% of shareholders in the Australian group.
“The Westfield investors understood that we consider the price is full and fair,” Cuvillier said. “It’s the right balance between cash and shares, and the right balance between Unibail-Rodamco’s interests and Westfield’s interests.”
Westfield’s properties include shopping malls in east and west London and the retail space in New York’s World Trade Center. It gets almost 70% of its $1.8bn annual revenue in the US.
Cuvillier: The future of retail is not Internet only, it’s Internet and physical retail.
