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You can find the current article at its original source at https://www.theguardian.com/business/nils-pratley-on-finance/2017/dec/12/westfield-sale-amazon-shopping-centres
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| Version 1 | Version 2 |
|---|---|
| Westfield sale looks like a knee-jerk reaction to the Amazon age | Westfield sale looks like a knee-jerk reaction to the Amazon age |
| (30 days later) | |
| The rush to consolidate by owners of large shopping centres suggests they are seeking protection from the rise of online rivals | The rush to consolidate by owners of large shopping centres suggests they are seeking protection from the rise of online rivals |
| Nils Pratley Financial editor | Nils Pratley Financial editor |
| Tue 12 Dec 2017 19.32 GMT | Tue 12 Dec 2017 19.32 GMT |
| Last modified on Wed 14 Feb 2018 16.54 GMT | |
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| The crisis of confidence among owners of large shopping centres is contagious. Last week it was Hammerson, the Birmingham Bullring folk, bidding for Intu, owner of Gateshead’s Metrocentre. | The crisis of confidence among owners of large shopping centres is contagious. Last week it was Hammerson, the Birmingham Bullring folk, bidding for Intu, owner of Gateshead’s Metrocentre. |
| Now, on grander scale, French giant Unibail-Rodamco is paying $25bn (£18.5bn) to own Westfield, the Australian outfit that has erected its multistorey car parks, with malls attached, in east and west London. | Now, on grander scale, French giant Unibail-Rodamco is paying $25bn (£18.5bn) to own Westfield, the Australian outfit that has erected its multistorey car parks, with malls attached, in east and west London. |
| The new duo claimed “compelling” rationale for the deal but never quite got round to saying what it’s supposed to be. It can’t be the cost savings since they are tiny in the context of a company that will own €61bn-worth of assets. | The new duo claimed “compelling” rationale for the deal but never quite got round to saying what it’s supposed to be. It can’t be the cost savings since they are tiny in the context of a company that will own €61bn-worth of assets. |
| The savings are worth just €100m, of which only €60m is attributed to eliminating “corporate overheads”, which presumably means closing Westfield’s Australian office. | The savings are worth just €100m, of which only €60m is attributed to eliminating “corporate overheads”, which presumably means closing Westfield’s Australian office. |
| Instead, the impetus for this deal seems to be the idea that greater size offers better protection from the rise of online shopping. The new firm will certainly be big. Unibail brings 69 shopping centres in Europe, including Forum des Halles in Paris. Westfield, aside from the two London sites, has interests in 33 centres in the US. | Instead, the impetus for this deal seems to be the idea that greater size offers better protection from the rise of online shopping. The new firm will certainly be big. Unibail brings 69 shopping centres in Europe, including Forum des Halles in Paris. Westfield, aside from the two London sites, has interests in 33 centres in the US. |
| At the margin, maybe size helps. An international fashion brand seeking shops across Europe and the US could save time and hassle by making a single call to the Unibail/Westfield combo. | At the margin, maybe size helps. An international fashion brand seeking shops across Europe and the US could save time and hassle by making a single call to the Unibail/Westfield combo. |
| In the end, though, property is always local. It’s hard to understand why painting the “world famous Westfield brand” on the Unibail centres is supposed to pull in more punters. Even the two London Westfields feel very different. | In the end, though, property is always local. It’s hard to understand why painting the “world famous Westfield brand” on the Unibail centres is supposed to pull in more punters. Even the two London Westfields feel very different. |
| The calculation, then, is that investment risk in the age of Amazon is best spread across a broader portfolio of properties. That’s not so silly from the point of view of Sir Frank Lowy, Westfield’s 87-year-old founder, who regards Unibail as “the natural home” for the business he built. But a compelling logic? The rush to consolidate looks more like a defensive kneejerk reaction. | The calculation, then, is that investment risk in the age of Amazon is best spread across a broader portfolio of properties. That’s not so silly from the point of view of Sir Frank Lowy, Westfield’s 87-year-old founder, who regards Unibail as “the natural home” for the business he built. But a compelling logic? The rush to consolidate looks more like a defensive kneejerk reaction. |
| Trump can’t cloud climate change progress | Trump can’t cloud climate change progress |
| When Donald Trump began the process of pulling the US out of the Paris agreement on climate change in June, a few optimists suggested there might be a silver lining to his damaging action. The rest of the world might be so appalled that it would show greater unity. | When Donald Trump began the process of pulling the US out of the Paris agreement on climate change in June, a few optimists suggested there might be a silver lining to his damaging action. The rest of the world might be so appalled that it would show greater unity. |
| The good news, to judge by three developments this week in the financial world, is that there are reasons to be cheerful. First, the World Bank said it will no longer finance upstream oil and gas projects after 2019; the only exceptions will be in the poorest countries where other sources are energy are hard to secure. | The good news, to judge by three developments this week in the financial world, is that there are reasons to be cheerful. First, the World Bank said it will no longer finance upstream oil and gas projects after 2019; the only exceptions will be in the poorest countries where other sources are energy are hard to secure. |
| Second, Bank of England governor Mark Carney announced that an initiative to push companies to reveal their direct and indirect exposures to global warming is gaining traction. | Second, Bank of England governor Mark Carney announced that an initiative to push companies to reveal their direct and indirect exposures to global warming is gaining traction. |
| The UK’s big six banks have signed up and are committed to saying how much they have lent to companies that pose the biggest risks to the climate. Eight out of 10 of the largest asset managers and insurance companies are also part of the effort and say they are committed to financing a lower-carbon global economy. | The UK’s big six banks have signed up and are committed to saying how much they have lent to companies that pose the biggest risks to the climate. Eight out of 10 of the largest asset managers and insurance companies are also part of the effort and say they are committed to financing a lower-carbon global economy. |
| Third, US oil giant ExxonMobil has finally agreed to bow to its shareholders’ wishes and reveal data on how governments’ actions to limit the increase in global temperatures will affect its business. We await details, but at least Exxon, after years of resistance, has accepted that it must publish. | Third, US oil giant ExxonMobil has finally agreed to bow to its shareholders’ wishes and reveal data on how governments’ actions to limit the increase in global temperatures will affect its business. We await details, but at least Exxon, after years of resistance, has accepted that it must publish. |
| These are all small steps – and, note, greater disclosure of risks is not the same as mitigating actions. But they are welcome signs. | These are all small steps – and, note, greater disclosure of risks is not the same as mitigating actions. But they are welcome signs. |
| So is the fact that, while there was no official US presence at the Paris summit at which Carney spoke, there were plenty of American non-government organisations and city mayors. Trump’s lead, it seems, is being rightly ignored. | So is the fact that, while there was no official US presence at the Paris summit at which Carney spoke, there were plenty of American non-government organisations and city mayors. Trump’s lead, it seems, is being rightly ignored. |
| H/2 must spell out where it stands | H/2 must spell out where it stands |
| H/2 Capital Partners, when it takes ownership of Four Seasons, the UK’s largest care homes operator, must open up and tell us what it stands for. | H/2 Capital Partners, when it takes ownership of Four Seasons, the UK’s largest care homes operator, must open up and tell us what it stands for. |
| The reticent style was vaguely understandable while H/2 was buying up Four Seasons’ debt at a discount to face value. But, when it claims control of the business from current owner Terra Firma, the US hedge fund will be responsible for the care of 17,000 elderly people who will want to know that it brings more to the industry than a keen eye for property values. | The reticent style was vaguely understandable while H/2 was buying up Four Seasons’ debt at a discount to face value. But, when it claims control of the business from current owner Terra Firma, the US hedge fund will be responsible for the care of 17,000 elderly people who will want to know that it brings more to the industry than a keen eye for property values. |
| Spencer Haber, H/2’s founder, apparently likes cats, dogs and toucans (he produced a film about the latter). It’s not much to go on, and there’s no point checking the corporate website for past deals because there isn’t one. | Spencer Haber, H/2’s founder, apparently likes cats, dogs and toucans (he produced a film about the latter). It’s not much to go on, and there’s no point checking the corporate website for past deals because there isn’t one. |
| Bland statements about bringing “responsible private capital” are not enough. Who are you, and what’s your track record in the US? | Bland statements about bringing “responsible private capital” are not enough. Who are you, and what’s your track record in the US? |
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