New Westfield Owner Forges Forward with $1.2bn Build to Rent Project
French retail giant Unibail-Rodamco, which completed a $33 billion takeover of Sir Frank Lowy’s Westfield empire last year, has partnered with Canadian companies PSP and QuadReal to develop a £670 million (AUD$1.2 billion) residential scheme in London.
Pension fund Public Sector Pension Investment Board and global real estate company QuadReal Property Group struck the deal with the the French company to develop and manage the company’s long-time plan for the Cherry Park precinct next to its newly owned Westfield Stratford City.
The Cherry Park Development, which will be one of London's largest single-site schemes, will feature approximately 1,200 new homes with high end facilities, workspace and public areas within a build-to-rent model.
PSP and QuadReal will each take a 37.5 per cent share in the Cherry Park Partnership.
Unibail-Rodamco-Westfield (URW) will retain a 25 per cent share and be appointed as the development and asset manager.
Leveraging residential with retail
Unibail-Rodamco-Westfield, the global mall giant formed out of Unibail's $33 billion takeover last year, will now leverage its Westfield Stratford City shopping centre by developing a massive project fit for the private rented sector.
“With the Cherry Park Partnership, we are leveraging our unique know-how and joining with strategic capital partners to reinvent city districts,” URW chief development officer Olivier Bossard said
“This new residential quarter in the heart of Stratford City is an example of the Group's strategy to significantly increase the densification of exceptional and highly connected retail destinations by adding offices, residential, hotels and other uses, where relevant.”
The “developer and operator of flagship shopping destinations” currently own and operated 93 shopping centres in 13 countries, with 56 of those properties being flagship centres in major gateway cities.
“London's residential sector is chronically undersupplied and Cherry Park supports PSP's broader long-term sectorial strategy to develop professionally managed residential assets alongside best-in-class investment partners,”
“Once completed, this will be one of central London's largest residential rental schemes and will offer future residents an incredible level of connectivity in an exciting and unique mixed-use location.”
Construction work is set to start in the second quarter of this year, with a phased completion and a delivery expected after 2023.
Westfield Stratford City in numbers
• 175,000sq m of total retail floor area
• Supports 10,000 permanent jobs
• The centre is anchored by a 22,000sq m John Lewis department store, 3,000sq m Waitrose supermarket and 12,600sq m Marks & Spencer department store.
Unibail-Rodamco, which trades on the Paris and Amsterdam exchanges, retains a secondary listing on the Australian Securities Exchange, is currently looking to reposition assets.
URW disposed of €2.0 billion (A$3.1 billion) worth of offices and shopping centers across 2018 at a pace well ahead of its original expectations.
Over the next two years URW plans to sell almost €4 billion (A$6.3 billion) of European assets to reduce its leverage to between 30-40 per cent.
URW has also halted its £1.4 billion (A$2.5 billion) project to open a third London mall in southern suburb Croydon, due to political and economic uncertainty surrounding Brexit and structural changes in the retail sector.
