Thursday, 16 April 2009

Mall collapses and the changing retail landscape

It is hard to disentangle the numerous threads that are part of this global recession, especially as they relate to the specter confronting commercial real estate and retailing,

News today that General Growth Properties Inc., the second-largest U.S. shopping-mall owner, has filed for bankruptcy after failing to refinance more than $27 billion of debt, could seem to be just another symptom of the overall disappearance of the voracious US consumer.

While this is undoubtedly true just how big a component of the lack of final demand at the physical retailing level is due to consumers migrating to online shopping? In addition how much is due to the notion that consumers are less motivated to travel out to major malls and the increasingly generic nature of their offerings?

The UK is also witnessing a rather alarming decline in footfall at major malls and the most visible example at present is the very disturbing lack of interest in the recently opened Westfield Shopping Center in west London. The mall is owned by the Westfied Group which claims on its website to be "the world’s largest listed retail property group by equity market capitalisation" and based in Sydney it operates in North America and Europe. Some of the woes that this company is experiencing in its London operations can be found in this piece from the Australian press

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