Westfield bullish despite the UK’s economic gloom

Shopping centre giant Westfield, which has begun work on a £1.5 billion complex of shops, offices and hotels at the Olympic Park at Stratford, says it is not worried about gloomy economic conditions.

UK boss Michael Gutman was bullish about prospects for both Stratford and Westfield's up-market £1.7 billion White City development, due for completion at the end of next month.

A housing market slump and rising food and fuel prices are keeping shoppers at home, with retail sales in August falling to their lowest since 1983. But Gutman says Westfield is confident of continued long-term expansion in retail sales in the capital.

"I think we are currently in the UK in a fairly difficult environment but we look through economic cycles. London is undersupplied with quality retail space."

Last month, Westfield revealed a fall in half-year net profit because of a credit crunch-related drop in the value of its shopping malls.

Despite the problems, the company said it had leased about 96% of the space at White City.

"We've been in the UK since 2000 and as of today have about £5 billion invested at a gross level in the UK market and we believe over time there is an opportunity to double that investment."

Gutman said Stratford would be central to renewal plans for the region long after the Games were over and had already secured retailers such as John Lewis and Marks & Spencer. He is confident of the good transport links and demographics around the two sites.

David Higgins, the Australian head of the Olympic Delivery Authority (ODA) and former chief executive of Aussie developer Lend Lease, says the difficult times might even benefit Westfield.

"As we develop through a slowing economy it means that procurement of construction will be more competitive," he said.