Broadway shopping centre put on hold

Westfield, the world’s biggest shopping centre operator, blamed the current economic climate for its decision to delay the Broadway scheme.

It made its decision as it reported an Australian $2.2 billion annual loss in its preliminary results for 2008.

The news was greeted with widespread disappointment by politicians and business leaders across the Bradford district.

Although rumours have been rife about delays to the Broadway scheme, this is the first time Westfield has gone on the record to officially admit that the scheme has been put on hold.

A Westfield spokesman said: “Given the serious dislocations going on at present in global financial markets we will not be commencing construction on any major projects, including Bradford, during 2009.

“However we continue to work on predevelopment, pre-letting and project planning so that we are in a position to recommence when the environment stabilises.”

In its annual results statement, Westfield revealed that its shopping centre net operating income grew by 2.8 per cent in 2008, with growth in Australia and New Zealand of 4.7 per cent set against a 1.8 per cent decline in the UK.

Bradford Council chief executive, Tony Reeves, said the news was “disappointing and frustrating” but not unexpected in the economic climate.

He said: “Retail developments across the world are being affected by the recession. Timescales for the construction of other developments regionally and nationally are being similarly revised.

“Westfield is continuing to progress pre-construction work for the development, including securing the required number of pre-lets. It is important that the pre-construction work continues so that the development is ready to start as soon as economic conditions improve.

“The Council will continue to work with and support Westfield in the expectation that construction work will begin on the Broadway site next year if the economic downturn eases.”

In total, Westfield has suspended 14 new developments this year, but will proceed with its huge development in Stratford which it wants ready for the London 2012 Olympics.

Councillor Adrian Naylor, executive member for regeneration for the Tory-led Council, said: “I am disappointed on behalf of the people of the district.

“It’s frustrating because everyone wants this to happen, not just us but the shops that are going to be in the centre and Westfield itself.

“The economy is in such a state that, if this had been a quarter where we had seen growth, this project would have been in the construction phase by now.

“What we must do now is concentrate on what we as a Council can deliver and that’s the Park at the Heart.”

Coun Naylor said it was not in the Council’s power to resolve the difficulties facing commercial propositions such as the Westfield scheme.

Councillor Ian Greenwood, leader of the Council’s Labour group, said: “Obviously I am disappointed that the project will move back a bit.

“I can’t say I am particularly surprised in the current market. I still have belief that Westfield is a good company and I hope it can deliver the city centre regeneration.”

When asked if the Broadway site could be used for anything else, Coun Greenwood said: “For my money, the site is the absolute key site that needs major retail on it and Westfield are the people who own it and are looking to develop it. I can’t see any other use for the site.”

Councillor David Ward, deputy leader of the Council’s Liberal Democrat group, said: “My concern on this is that the plan A was always to build the Westfield development in Bradford around about 2006.

“Plan B is for Westfield to build it whenever they are ready and that could be any time.

“There’s no other option on the table and I always thought that was a weakness.

“They have relied too heavily on that development being done quickly with no thought as to what happens if it doesn’t take place.

“Westfield is quite happy for that site to stay in that state for five or six years. We have two councillors on the board of Bradford Centre Regeneration – the leader of the Conservative group and the leader of the Labour group – who need to start representing the people of the district and saying this is just not good enough.

“I have never heard either of them make any public statement about the slowness of the development taking pace.”

Coun Ward said the Council should have looked to boost other businesses in the city centre and to redevelop other parts of the retail offer in case the Westfield scheme did not get off the ground.

l Continued on facing page l From previous page “Instead of that, they put all their eggs in a very expensive basket,” added Coun Ward.

Mike Cartwright, of Bradford Chamber of Commerce, said the news was frustrating, disappointing but understandable.

He said: “It’s very sad but not entirely unexpected.

“The problems mounting in the economy on a local, regional and international basis, have always made this decision harder for Westfield on whether or not to proceed.

“We sympathise with them. Obviously, being a business representative organisation, we understand the difficulties that have been facing them in the second half of last year.

“This news confirms the slowdown in the local regeneration.”

Mr Cartwright said Bradford residents and Westfield viewed the scheme from different ends of the telescope.

He said: “They are a developer that has got to be clinical and hard-nosed in their business decisions. The point they have made repeatedly is that there’s no point opening a half-empty shopping centre. That would do Bradford no good at all.”

Mary Frame, of Bradford Chamber of Trade, said: “From what they are saying, it’s anyone’s guess as to when they will start construction.

“It’s a pity that the Council didn’t have any penalty clauses in place for a start date. I think they have been very slack in that direction, but it’s too late now.

“The traders are despondent about Westfield because that’s going to be the catalyst. This makes things very difficult for the city centre.

“People are going in their droves to Halifax and Leeds and once we have lost that custom, it’s very difficult to win it back.”

e-mail: will.kilner @telegraphandargus.co.uk

Are there alternatives?

Phillip Wong, of Redmayne-Bentley stockbrokers, answers some key questions.

Q Is there any way Bradford Council could help to kickstart the scheme financially or otherwise?

A The possibility of Bradford Council helping to kickstart the scheme seems unlikely. With so many local councils having to make redundancies and struggling for money, a contribution to a private shopping centre development would presumably not be high on their priorities.

Q When do you feel the climate will be right to start work on the Broadway scheme?

A The problems in the economy all stem from the banking crisis. When we first see clear signs of lending and confidence being instilled back into the sector and in the economy I think that this would be a good base to reconsider starting the project again. With so much Government money being pumped into the system already, this has not had an instant impact.

The economy is expected to kick start at the back end of this year and into early 2010, but truth is that we could see the recession drag well into 2010. Consumer confidence needs to rebuild as they are at all time lows and thus, building a new shopping complex at this time does not seem rational.

Q Westfield owns the site and is understood to have spent more than £80 million preparing it for redevelopment. Is it reasonable to suggest that any other shopping centre company would be willing to purchase the development and get things moving more quickly?

A A rival shopping centre company could in theory take the development off Westfield’s hands having paid a fee. Again, the question has to be asked, who would take the project on? This is a global credit freeze and companies across the globe are struggling to raise cash for new business investment.

Companies are hoarding cash as opposed to spending it on new projects. Again, the problems all stem from the banking crisis.