Westfield backs down on service charges

Jan 2009 101 Westfield has backed down in a dispute with tenants over service charges – a sign that it is suffering in the economic downturn?

Europe’s biggest urban shopping mall was drawn into a dispute with 23 retailers over the charges it levied for shared facilities at the 43-acre centre in West London.

Now The Times reports that Michael Gutman, the managing director of the £1.6 billion centre, has conceded that the charge will be adjusted. “Yes, there’ll be a reduction,” he said. “This is what we’ve been doing at our other seven buildings in the UK, where we recently reduced service charges by 10 per cent.” Westfield had charged £14 per sq ft, about 50 per cent more than most other centres.

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Martin Crossley, of King Sturge, a property consultancy, told The Times: “The reality is that Westfield has failed to perform. It looks fully let – but talk to the retailers and they’ll say they’re on very good terms.” Rent for prime spots at Westfield is thought to be about 30 per cent below Bluewater, Kent.

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