Westfield Around The World
Westfield, now active in four countries, is proving that the shopping center business can be global. SCB went globetrotting to find out what the company is up to, what retail is like in Australia, and how Westfield is transferring its knowledge globally.
Randall Shearin

Creating a shopping center company that is active worldwide has suddenly become popular as U.S. developers discover that investment overseas pays off. For Westfield, however, being a global player has been a reality for the company for almost 30 years. Today, the Westfield Group is one of the largest owners of shopping centers in the world, and it has seamlessly grown its portfolio across the globe, bringing new ideas to its centers worldwide as it goes.

Shopping Center Business recently traveled to Los Angeles and Sydney, Australia, to meet with Westfield's senior management, visit the company's centers and find out how Westfield makes being a global shopping center player a reality.

Global Reality

Westfield is active in Australia, New Zealand, the United States and the United Kingdom. The company's roots are in Australia, where the company has its world headquarters. In Australia, big business is followed more closely than the celebrity culture that dominates the U.S. news, and Westfield is in the headlines nearly every day. Additionally, a majority of Australians shop at a Westfield property regularly, and all of the company's centers are branded with the company's name. As a result, everyone knows what Westfield is and what the company does.

Westfield has partnered with Forest City to redevelop San Francisco Centre. Westfield management believes that the center will be one of the top showplaces for retail in the world when the renovation and addition open in late 2006.

Westfield became active in New Zealand in 1997, when it purchased 10 centers — which it was already managing — from St. Luke's. The company also has one greenfield site in New Zealand under control; it plans to develop the site in the near future.

The company entered the United Kingdom in March 2000, and has since acquired interests in eight centers and four urban regeneration projects in the market. The company now has a considerable presence there, with about 400 people in the U.K.

Westfield Bondi Junction in Sydney is Westfield's largest redevelopment to date. It is also the top property in the company's portfolio.

To prove the company's growth over the last 13 years, one only need look at the bottom line. In 1992, Westfield had A$3 billion (US$2.29 billion in today's dollars) in assets worldwide; today it has A$44.5 billion (US$33.2 billion). Westfield operated around the world for a number of years as three listed property trusts: Westfield Holdings, Westfield Trust, and Westfield America Trust. The three entities had corporate structures similar to REITs. The companies were publicly traded on the Australian stock exchange. In 1997, as its U.S. portfolio began to grow, the company spun that off into a separate U.S. REIT, called Westfield America Inc., which was traded on the New York Stock Exchange. In 2001, the stock was delisted and later traded on the Australian exchange as Westfield America Trust. In 2004, the company combined all three of its entities, merging them all in to one common vehicle, the Westfield Group.

Retailers began opening at Westfield Bondi Junction in November 2003. About 300,000 people visit the center in a normal week, but closer to the holidays the volume climbs to 500,000 people per week. The center is the Number 1 center in the Westfield portfolio worldwide. Restaurants are fully booked on the weekends and the cinema is one of the top theaters in Australia.

Australia – Where It All Began

Australia has some similar makeup to America. Most of the population of the country has an ethnic background from another culture. However, unlike America, most of Australia's population is more recently immigrated. The country's population has more than doubled since World War II. In Australia, the vast majority of cultural influences for food come from Eastern Europe and Asia. Australia has large populations of Greeks, Italians, Balkans, Vietnamese and Thai. Prior to World War II, the country was dominated by the English. The influx of immigrants to the country in recent years has transformed its cuisine. As a result, Thai food is as common in Australia as Mexican food is in America — and it comes in as many shapes and forms from fast food to sit-down white tablecloth. For shopping center operators in Australia, like Westfield, this has meant that the food court can be more than just chain operators. In most cases, the food courts in Australia are a mix of local and national retailers. However, the quality of food, and price points of the retailers can vary. It is not uncommon in Australia for consumers to seek out a food court retailer based on the quality and uniqueness of a particular tenant.

“In the U.S., there is a strong culture to have large franchises dominate the food court,” says Steven Lowy, co-managing director of Westfield Group. “The tenant base for food courts in Australia is much smaller, but it is much deeper because we have the ability to find the best local operator for many different types of food and invite them into the mall. We have a worldly food culture that we take full advantage of at the food court.”

Similarly, in the mall environment, there are fewer national retailers in Australia than in the U.S. Again, the tenant base is smaller, but the variety of retailers, because so many are local or regional, is larger. Because of this, Westfield often deals with retailers that have little to no credit or establishment.

“But they have entrepreneurship and merchandising acumen that larger retailers do not have,” says Steven Lowy. “There may not be a big balance sheet behind smaller retailers, but the fact is we have faith in them or we wouldn't sign a lease with them.”

This leads to a big difference between the U.S. and Australian shopping center industries: the lease term is dramatically shorter in Australia. The average lease in Australia runs 3 to 5 years. Westfield will do more than 3,000 lease transactions this year across its 54 properties in Australia and New Zealand. About 2,000 of those lease transactions will be in its existing centers, while the balance will be in leasing new developments and expansions under construction. The volume of activity is much greater — and the vacancy rates are lower. In Australia, the vacancy rate for retail space in Westfield's centers is less than 1 percent. Westfield's U.S. centers are currently about 93.8 percent leased.

Westfield is known for its Playtowns, soft-play areas where children can play and parents can rest. These are part of the company's centers worldwide.

In Australia, since there are only two department stores and three discount department stores, options for anchors are relatively limited. Grocery stores also anchor malls and bring a number of tenants with them. There are two main players in the supermarket business, Coles and Woolworths. Another rising contender is European grocer ALDI, which has opened in several Australian markets. In addition to those anchors, there are also what are known in the industry there as “mini-majors,” smaller anchors like national electronics stores and bookstores, like Borders Books3, which take up spaces larger than specialty shops but smaller than department or grocery stores.

In Australia, people do their shopping frequently, dropping by the grocery store two to three times per week. Grocery stores in Australia are mainly dry goods merchants. Items like meat, seafood, produce and liquor are sold by separate merchants who surround the grocery store in the mall. Thus, a grocery store anchor brings with it many different tenants. And often, it is these tenants who are the draw to the grocery store in a particular center. For instance, someone may like the particular butcher in front of a Woolworths location, so she will shop at that Woolworths.

At most Australian centers, as you approach the grocery store, you pass through the produce retailer, which appears to be in the common area of the center. Surrounding the produce retailer (or “fruit & veg” as the Australians call it) are the butcher, the fishmonger, a liquor store, a coffee stand and sometimes other food uses (a bakery, for instance). In a corner of these retailers is the entrance to the grocery store, which sells most of what is on the aisles in U.S. grocery stores. Most do not purvey produce or meat.

Bondi Junction was the first of several projects that Westfield has lined up that will showcase the company's   forward-thinking design and leasing capabilities. Next to follow are Westfield Century City in Los Angeles, opening this month; followed by Westfield San Francisco Centre next year; White City in London; and Centrepoint in downtown Sydney.

American centers, in general, are much larger than Australian malls. Stores in Australian malls average 102 square meters (about 1,000 square feet); small shop space in the U.S. averages about 2,500 square feet. The centers are made up of 50 to 60 percent national chains and 40 to 50 percent local or regional retailers.

“We are a little more efficient because we are getting greater sales out of smaller areas,” says Bob Jordan, Westfield's chief operating officer for Australia and New Zealand.

While a strong performing mall in the U.S. has sales per square foot between US$400 and US$500, a good mall in Australia will do substantially more than that. A strong performing Westfield center in Australia could average nearly US$800 in sales per square foot. Bondi Junction will have sales of A$750 million (US$548 million) this year. Its second-highest performing center in Australia, Westfield Southland in the Sydney suburbs, has sales of A$644 million (US$471.2 million) per year.

Implementing Ideas Worldwide

Westfield San Francisco Centre, San Francisco, California.

“We want every job we do to be better than the last one,” says Jordan. “Bondi Junction is a great example of how we stretched ourselves to the next limit. A lot of the things we did there are not only innovative for the Australian market, but also for the world market.”

Bondi Junction is the company's largest redevelopment project to date. At an estimated A$755 million (US$554 million), its costs can be compared to large scale U.S. projects. Not only was it the most expensive project Westfield has embarked on to date, but it was also the most complex. The project involved moving floorplates and ceiling heights, making the center cross a busy street and pushing the envelope with innovative design. The center also sat in two separate districts of the city, meaning that there were two council authorities involved. Complicating matters further, Westfield had to keep some retailers open during construction, meaning that the center had to be built around some retailers, like department store David Jones.

Retailers began opening at the center in November 2003. About 300,000 people visit the center in a normal week. Closer to the holidays, the volume climbs to 500,000 people per week. The center is the Number 1 center in the Westfield portfolio worldwide. Restaurants are fully booked on the weekends. The cinema is one of the top theaters in Australia.

Westfield formed a joint venture with insurance company AMP to redevelop Bondi Junction. In the years preceding the redevelopment, Westfield began to amass properties around the existing retail that AMP formerly controlled. In 2000, Westfield and AMP controlled a lot of retail in the area, and set about on a plan to unite all of it under one roof. It was a tricky project, mainly because a lot of the retail sat in the lower floors of several office towers, and a thoroughfare ran between two of the towers. Westfield created a plan that united all of the retail, included a multi-level pedestrian bridge, a new-style food court, department stores, grocery stores and all of the small shop retail using cutting edge design. Once the project opened, the company coupled it with amenities that didn't exist in any center in the world. The resulting center is a showpiece for retail worldwide. Westfield Bondi Junction includes two department stores, two discount department stores, two grocery stores, specialty retail, a cinema and restaurants, all clad in modern architecture.

To someone from the U.S., Bondi Junction is the anti-mall and the best mall at the same time. When you enter Bondi Junction from the street or from the underground parking deck, you feel as if you have entered a five-star hotel instead of a mall. You are constantly reminding yourself that this is a 1 million-square-foot mall and not a boutique hotel. Even with hundreds of other shoppers around you, Bondi Junction still feels personal. It also has a star-quality about it, where you feel that the center is really a showpiece.

One side of Bondi Junction is encased in glass, bringing the outside in — in the middle of a bustling area of the city. It is a mixed-use project that incorporates residential and office uses as well as retail. Food is a predominant focus of the center. Bondi Junction has a typical mall food court, with players like Kentucky Fried Chicken and McDonald's, and an upscale food court that is like nothing ever seen in the U.S.

“Because of the type of demographic that we were working with, we knew we needed an edge for the upscale food court,” says Frank Alvarez, principal designer for Westfield's Australian portfolio. “It becomes a much softer, lounge-like, groovy feel, as opposed to the standard shopping center's fare.”

The more formal food court at Bondi Junction integrates higher end food users with the food court format. Only this isn't an ordinary food court. Upscale seating and dining areas are complemented by a wall of glass that looks out on Sydney Harbour. Wood flooring covers the area. The dining experience also includes eating on plates and cutlery. A Westfield-operated central scullery washes the dishes and flatware and provides each retailer with a clean supply. Westfield has lured local upscale food merchants to tenant the food court, and it has paid off. There are only two chains in the upscale food court. The price point is a few dollars higher than the center's more traditional food court, located in another part of the center and containing the national, local and regional retailers one might expect to see. Offerings include sandwiches, Japanese, Thai and Chinese food, among others. Since Bondi Junction is an upscale neighborhood (think L.A.'s West side, Atlanta's Buckhead or Chicago's Gold Coast), and while the clientele wants to eat quickly, it doesn't necessarily want to eat in a traditional food court environment. A recent article in the Los Angeles Times rated Sydney as having the best food in the world. With a reputation like that to uphold in one of the city's top neighborhoods, there was no way that “average” was going to cut it.

“The food court at Bondi Junction is a completely different version and different design,” says Peter Lowy, co-managing director of Westfield Group. “It is a number of iterations above most food courts.”

“We tried to approach this food court as a giant restaurant rather than a cafeteria-type feel as a lot of food courts have,” says Frank Alvarez. “It is a five-star approach to the food court, not only from the service level but from the presentation of the food.”

The high-end food court at Bondi Junction is a good example of how Westfield is using its ideas and transferring knowledge globally. This month, when the expansion of Century City opens in Los Angeles, a high-end “dining terrace” similar to that at Bondi Junction will open on a second level near the cinemas and Bloomingdale's.

Westfield Bondi Junction and Century City share many attributes. Both are located in extremely affluent metropolitan areas. Both also have a large office population surrounding them. Century City has evolved over the years as well. Built on former ranch land, the center was envisioned as part of the master-planned office and hotel community that exists there today. Westfield is adding a new wing to Century City along the west side of the center. The new wing will contain the new food court/dining terrace, shops and a showcase AMC Theatres 15-screen stadium seating theater. The entire center is also being overhauled so that the design is flowing throughout, including the Macy's building and all existing space. The old food court and the old theater will be converted into two levels of shops. New tenants, like Borders Books & Music and The Container Store are joining the expansion. The total investment for Century City is estimated at US$150 million. There are other plans for the future as well. Westfield recently purchased two office towers along Avenue of The Stars, and eventually hopes to extend the east side of the center to the office buildings.

“Century City has come about in a short time since we purchased it in the Rodamco exercise,” says Steven Lowy. “Our embracing of entertainment and the impact of food and retailing will be an experience more for Australia than the United States. We are transferring our knowledge and skills from one country to the next.”

Just as it did at Bondi Junction, Westfield had conversations with each of the food operators and prescribed the design of each unit in the dining terrace. At Century City, Westfield has worked with retailers like Panda Restaurant Group to create places where its upper end consumer will want to eat. Westfield is also bringing in local operators, like Coral Tree Café, which operates an upscale restaurant in the Brentwood area of Los Angeles, to debut along with the new dining terrace.

As with Bondi Junction, a Westfield-operated central scullery will provide plates and flatware to every food court retailer to add to the dining experience at Century City. The scullery is capable of handling 3,000 place settings per hour. Similar to the experience at Bondi Junction where diners overlook Sydney Harbour, diners at Century City will dine in a semi-covered outdoor environment on a second level that overlooks the center and the Century City skyline. Glass railings allow those sitting at tables to have a panoramic view.

A rendering of the new Westfield San Francisco Centre, which will open in the fourth quarter of 2006.

As Westfield continues to evolve its upscale food court concept globally, it expects that other developers will catch on to the trend. Westfield has no problem with this, as Peter Lowy says, because the concept will raise the bar for food service in shopping centers. As Westfield began the concept of family restrooms and children's play areas, the company also sees its upscale food courts as an industry standard.

“I think our dining terraces should be replicated at every mall as a better product to give the consumer,” says Peter Lowy.

Westfield Topanga in suburban Los Angeles is one of the most talked about centers in the shopping center industry. When the center opens in early 2007, it will be anchored by a Target and Nordstrom — and a Neiman Marcus will join in 2008. It is the first time that Target and Neiman Marcus will co-anchor a shopping center.

A new idea that Westfield is trying at Century City is to have sinks on the exterior of the restrooms in the food hall. The idea behind this is that some people just want to wash their hands and don't want to go to the restroom. The company hopes that the hand-washing stations become a popular amenity that soon spreads to its other redevelopment projects.

Westfield's valet parking program is another item that the company has taken overseas. Building on U.S. valet services, but launched and tested at Bondi Junction, Westfield's “Valet Mate” program was recently added at Century City. Valet Mate gives drivers a remote transmitter along with a ticket when they drop off their car. When the driver is 5 minutes from needing his or her car again, he or she presses the transmitter, signaling the valet to retrieve the car. At Bondi Junction, a special lobby with leather seating and wood flooring is available for drivers to wait while their cars are brought around. Valet parking shoppers can also register to win a car that is on display — Westfield partnered with a local Land Rover dealership to give the car away to shoppers who valet park.

“It is a very good opportunity for us to partner with others to give our customers added benefits,” says Timothy Roberts, Bondi Junction's general manager. At the end of October, Westfield and the car dealership gave away the A$50,000 car to one of the center's loyal valet parking customers. Discussions of future programs have included an airline that wants to place its first class seats in the lounge to show potential customers what it would be like to fly overseas on its premium service. Because of the demographics of the people who shop the center and use valet parking, the sponsorship benefits are enormous.

The “Valet Mate”   and partnership programs have helped to boost valet parking at Bondi Junction. Bondi Junction valet parks about 3,000 cars per month. The service is especially popular on   weekends, when time is of the essence for most shoppers. And most shoppers never complain about the A$10 fee to valet park, reports Roberts. Westfield expects the valet volume at Century City to surpass that at Bondi Junction.

“A lot of our customer service concepts have come from our U.S. market experience,” says Peter Lowy. “Valet parking never existed in our Australian centers. Now, it is an incredible amenity there.”

Redevelopment — and Reinvestment — Is The Plan

Key to Westfield's strategy with any acquisition is redevelopment. During the due diligence period, Westfield spends a lot of time on — and at — each center developing plans and pro formas. By deal closing time, the company is ready to go to work on the center, whether it starts immediately or is slated for a future time. Regardless of whether work begins or not, the day Westfield closes on an acquisition, its name goes on the center and all customer service amenities and branding are introduced.

Westfield defines itself as a niche player in the shopping center business worldwide. It has a unique investment philosophy that is capital-intensive. The company wants to redevelop every center it owns at some point, if it hasn't already. The company anticipates that it will significantly change each center in its portfolio — worldwide — every 7 to 10 years. Through its brand, the company has created a culture that is immersed in creating value — from center concierge to CEO.

“Reinvestment in and redevelopment of our existing assets is the investment philosophy of this company,” says Peter Lowy. “When we acquire new assets, we do our homework. We visit the centers, look at the cities and compile a lot of information.”

When Westfield acquired CenterMark in 1994 for US$1 billion, the company estimated that the portfolio would need US$800 million in redevelopment over the next 10 years. By 2004, the work had been completed and the centers, including its West County in St. Louis, were completely redeveloped. In 1997, when Westfield bought most of the assets of TrizecHahn for US$1.5 billion, the company estimated that it would spend US$1 billion over 10 years on redeveloping those assets. The majority of those centers have been redeveloped, including Westfield Santa Anita, Oakridge, Valley Fair, Parkway, and Capital and previously mentioned Westfield Topanga, which is currently underway, with only a few remaining untouched for the time being.  

Westfield is currently underway with a $50 million redevelopment of Sarasota Square in Sarasota, Florida, that will be completed in 2006.

Westfield is also underway with a large lifestyle expansion at Westfield Brandon in Tampa, Florida. Westfield Brandon4 is one of the last 30 malls to be built in the U.S. With such a new center, most developers would leave well enough alone. Not one to let the market get away from it, Westfield is adding an outdoor component to the mall.

“Brandon is not exciting enough retailing as it is,” says Steven Lowy. “You have department stores and you have shops in between. There is no entertainment and the food court is outdated. There is not enough shop space to satisfy the market and there is not enough depth of retailing to make the consumer want to come there on a regular basis. It is a great market; the retailers want to be there and the land is available for us to expand.”

In the U.K., Westfield is developing an expansion to The Eagle Centre in Derby, England. The £310 million (US$558 million) project will add a new Debenhams department store and food court and will upgrade many amenities to the center.

Westfield is also working on five new developments or redevelopments in Australia. This represents more than A$785 million (US$575 million) in construction work. This includes Helensvale, a new center on Australia's Gold Coast, which opened in mid-October. The company also has two projects under development in New Zealand underway, including a new center in Albany that it will begin construction on early in 2006. In 2006, the company will be launching the redevelopment of seven of its centers in Australia and New Zealand. By 2007, the company will have 11 redevelopments underway. While some of this is complete redevelopment, some of the projects are adding another phase. One of the projects, for instance, is an addition to the company's North Lakes, near Brisbane, which just opened in 2002.

Helensvale is a new center that Westfield opened in October on Australia's Gold Coast in Queensland.

Westfield's focus on redevelopment has a number of benefits to the company. First, it reinvests in an existing asset. It makes the asset stronger, thereby making the marketshare of the project better. Redevelopment also creates a better marketplace for the retailer to sell its goods.

“The more dynamic the environment, the more conducive it is for the consumer to want to be there, so the retailers can maximize their business,” says Steven Lowy. “Because retailing is a dynamic business itself, the mall business also needs to be dynamic to facilitate new formats for the retailers and to meet consumer demand.”

Westfield Burwood in suburban Sydney and Westfield West County in St. Louis are examples of how Westfield never settles. Westfield Burwood was developed by the company in 1966. It was the first center that had the Westfield brand attached to its name. In 1999, Westfield completely demolished the center and rebuilt it from the ground up. Reopened just before the 2000 Olympics in Sydney, Burwood has enjoyed nonstop success since.

“We built a building three times the size of the building that we built on the same piece of land 30 years before,” says Steven Lowy.

In St. Louis, Westfield demolished West County Center several years after acquiring it from CenterMark and rebuilt an entirely new center on the property within 2 years. Like Burwood, Westfield West County created a new center for an area whose demographics had changed since it had been built years before. Rather than let the market change and see sales diminish, Westfield continually plans redevelopments before they are needed. As a result, the company is always reinvesting in its centers   either physically or on paper.

Westfield is able to tackle such large projects quickly — many of them at one time — because the company is fully integrated. It has in-house architects, construction, development, marketing and leasing that all work together. As a result, the company is often able to redevelop a center before competition moves in. In many cases, Westfield has been able to stop competitive malls from gaining market share, or stop developing centers in their tracks. As lifestyle centers have popped up closer and closer to regional malls, Westfield's centers have been relatively unaffected, in part because of the company's “Hy-Style” program, which has been adding lifestyle components and unconventional anchors such as entertainment, fine dining, big boxes and discount stores to its regional malls to satiate retailer and consumer demand

“We very rarely buy anything on the cheap,” says Peter Lowy. “We create value through redevelopment.”

When making an acquisition, Westfield anticipates that it will spend 40 percent of the acquisition cost on redeveloping the project to be able to make its eventual desired return. It views redevelopment as an opportunity for its shareholders to make money, not as a risky venture.

“From a stock market perspective, shopping centers are a reinvestment opportunity,” says Peter Lowy. “If you keep reviewing your position in the marketplace and keep committing capital to it, the long-term value of the asset is enhanced rather than diminished.”

Because of its background with the few anchors in Australian retail, Westfield has been a strong proponent of discount retailers anchoring U.S. malls. Already, retailers like Wal-Mart and Target anchor some of the company's centers in the U.S., and Westfield wants to see more of this trend in the future and is actively pursuing it.

“The move to bring retailers like Target, Wal-Mart and Costco into the mall is bringing global retailing concepts to the U.S.,” says Peter Lowy. “Because of the Federated-May merger and the consolidation of the mall industry, the discount end of the market will have significant opportunity to expand as anchors in the next few years. Entertainment will also become an acceptable anchor.”

It doesn't take an expert to see that where there are two Federated-owned department stores there may soon be one. Many developers have been questioning the viability of their centers with only one anchor. Westfield looks at the vacancies with a positive eye and is working with the department stores to secure new anchors for any centers in question. Westfield has been in discussions to acquire some Federated properties at its centers. If it is successful, it will be another opportunity for the company to reinvest in its portfolio.

Westfield is also being creative and pushing the envelope with anchors. In San Diego, at Westfield Parkway, it opened a Wal-Mart at a center that is also anchored by Sears, JC Penney, Robinsons-May and Mervyn's. At Westfield Topanga, which the company will finish redeveloping in early 2007, it will open a Target in a center that is also anchored by Nordstrom — and a Neiman Marcus will join in 2008.

“The same customer goes to Target that goes to Neiman Marcus,” says Steven Lowy. “They just go there for a different need at a different time. We are very proactive in co-locating different forms of retailing into one building.”

The company's intense focus on redevelopment has put Westfield in a different category. The company has the largest development program in the United States among the major developers. Most of that work is redevelopment of its existing projects. The same is true for Westfield in the United Kingdom, where Westfield currently has 220 employees in its London office. Five years ago, it had five people in the London office.

“Our focus on creating value through the redevelopment of existing assets has been a trademark of the company since the early days,” says Steven Lowy.

In the U.S., Westfield has taken a back seat in many of the recent larger deals that have transpired. It   sat on the sidelines while Macerich purchased Wilmorite and General Growth purchased Rouse.

“We are concentrating on doing a lot of redevelopment and a lot of reinvestment in the U.S., because that's where we're getting a lot of returns,” says Peter Lowy.

In the United Kingdom, however, the company has spent upwards of £1.2 billion (A$3.6 billion/US$2.1 billion) acquiring portfolios and shopping centers over the last year. It is buying companies and assets there, just as it has in the U.S., that it can develop, redevelop and expand for future growth.

If you look at the strength of the company's business internationally, it has grown tremendously. In Australia, the company hasn't diminished at all. In fact, its marketshare and development program has grown phenomenally as Westfield has grown overseas.

One of the company's largest future projects sits in the heart of Sydney's central business district. It is the redevelopment of Centrepoint, a downtown shopping and entertainment district that was developed in the early 1980s. Westfield will unite several buildings, including the city's landmark Centrepoint tower that stands 250 meters (820 feet) in the air. Westfield plans an energy-filled development, similar to Bondi Junction, that unites multiple structures and brings amazing retail and entertainment to one of the most trafficked areas of Australia.

The site sits within A$600 million (US$439.7 million) of department store sales in the center of Sydney, Australia's largest city. It is the area with the most pedestrian traffic in Australia.

“I regard Centrepoint as the best retail site in Australia,” says Steven Lowy.

Transferring Global Knowledge

It is clear the driving force behind making Westfield a global company has been the ability to transfer the company's knowledge, culture and brand across borders. Now active in four countries, Westfield is able to make its operations seamless by transferring people internationally as well. Westfield's method of transferring skills by transferring people has worked well for the company. Its co-chief operating officer in the United States, John Schroeder, is an Australian. Its head of design in Australia, Frank Alvarez, is an American. These high-ranking executives help transfer different Westfield experiences and help to season the company's projects in different parts of the world. While some companies won't transfer executives throughout their portfolio, Westfield is doing it worldwide.

“We are able to look at every project with a worldly perspective, not just a domestic perspective,” says Steven Lowy. “When we work on Century City, for instance, we just don't look at people in West L.A. We're looking at what we're doing at Bondi Junction and what we are doing in San Francisco and what we are doing in England. That is the set of eyes that we have when we are involved in a project.”

Simon Cochrane, a Briton who helped design the expansion of Century City while working in the company's Los Angeles office, is now back in the United Kingdom working on the company's Stratford City project. The head of leasing in the United Kingdom, David Slade, is an Australian whose last project was Bondi Junction. The head of development for the White City project, Iain Johnstone, is a Scot whose last assignment for Westfield was the development of Bondi Junction in Australia.

While a lot of companies would be afraid to transfer their top management across borders, Westfield views itself as gaining talent in new frontiers versus losing a valued member of a team.

“We have been in America since 1977 and we have been in the U.K. since 2000,” says Steven Lowy. “We have been successful in a short amount of time in the U.K. because we have come at it from a different perspective. We have a number of the people in place in the U.K. who made our businesses in America and Australia successful. We have a very strong culture in the U.S. and in Australia, and putting people in place who know that culture helps to grow it quickly in a new territory. In addition, as our company is growing, our people are growing.”

Westfield has a powerful human resources career development program that is in effect at all of its offices. Part of that program can include international experience in different disciplines of the company. As Westfield has grown, it has been able to send executives overseas to help grow its business. Sending them overseas creates new opportunities for employees, as well as growing the individual's experience within the company.

“Our business is not constrained by opportunity, it is constrained by our ability to execute,” says Steven Lowy. “The real challenge is maintaining the ability to execute on an ever-expanding scale. We've been a company that has focused offshore since 1976. It's not new to us to go to another country. We have huge resources and an experienced staff that keeps coming through for us.”

Westfield has also been championed in the industry for its ability to keep and grow employees that it has attained through acquisition. Randy Smith, the company's executive vice president, for example, was hired when Westfield acquired St. Louis-based CenterMark Properties in 1994. Widely regarded as the man who introduced the Westfield brand to America, today Smith heads up all business development efforts for the company in the U.S.

“If you want to work in the shopping center business, I can't think of a more exciting place to work than Westfield,” says Steven Lowy. “I can't think of a more intense, interesting place to operate. We don't come at the business from an Australian perspective and we don't come at it from an American perspective. We look at our entire operations with a global perspective.”

“When you look at the global issues of the company, it is not a global business because retailers are leasing space globally — because they are not,” adds Peter Lowy. “The biggest issue for us on a global basis is knowledge transfer. Even though we deal with retailers market by market, the knowledge transfer is what gives us our competitive edge.”

Both Peter Lowy and Steven Lowy point to the company's brand name as a driving force behind so much of the company's success.

“You see the Westfield name on every center that we have,” says Peter Lowy. “Our customer service commitment and our operating philosophy all run back to the brand. The brand is important because when the customer uses all of the services we provide, the customer remembers who delivered those services. And if they were delivered in a manner that exceeds the customer's expectations, we then create customers in our malls for life. That is worth the investment.”

“The brand means a lot to us,” says Steven Lowy. “It changes the mall from a commodity to a franchise. It equates to quality for our employees, our retailers and for the consumer. Consumers expect a safe environment, a quality customer service experience and a whole range of goods and services at any building with the Westfield name on it.   It really adds value to our business.”

While they admit that it is challenging to run a business internationally, both Peter Lowy and Steven Lowy say that it has gotten easier over the years.

“Trumbull, Connecticut, is a very long way from Sydney,” says Steven Lowy. “But in 1976, it was a much longer way than it is today. Air travel, phone lines, faxes, computers have improved things drastically for us. Today, we can turn on a videoconference and be on with them in a minute.”

1 Target stores in Australia are not related to Target stores found in the United States. Target in Australia was founded as Lindsay & McKenzie stores. In 1968, Myer, Australia's largest department store chain, purchased the Lindsay & McKenzie chain and in 1973, changed the name to Target. Today, the Target stores in Australia are under the control of Coles Myer Ltd., Australia's largest retailer.

2 The first Kmart store in Australia was built in 1969 in Burwood, a Sydney suburb. The first Kmart store was a joint venture whose partners included S.S. Kresge Co., the former owner of the U.S. Kmart stores. At the time the first Kmart opened in Australia, S.S. Kresge owned 51 percent of the partnership. By 1994, however, Kmart Corporation (now Sears Holdings) had divested itself of all interests in the Australian stores. Today, Kmart Australia Ltd. is operated by Coles Myer Ltd., Australia's largest retailer, and is unrelated to the U.S. stores.

3 Ann Arbor, Michigan-based Borders Group, Inc., operator of Borders Books & Music, is active in Australia and has been expanding gradually in the country for the past few years.

4 Urban Shopping Centers built Brandon Town Center, now known as Westfield Brandon, in 1997.


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