EXCLUSIVE: URW To Focus On Existing Assets After Opening Doors To New Scheme

After opening the doors to the retail component of one of Europe’s biggest urban regeneration sites in Hamburg, Germany, on 8 April, Unibail-Rodamco-Westfield is to refocus on its existing retail-led assets amid a more risk-averse investment environment and build out opportunities around its European and UK shopping centres. 

Speaking exclusively to Bisnow the day after the opening, URW Chief Strategy and Investment Officer Vincent Rouget said that the conclusion of the 4.5M SF Westfield Hamburg-Überseequartier at the centre of Hamburg’s huge HafenCity redevelopment is set to mark the start of a refocused investment strategy based around improving and extending its European and U.S. malls.

While URW has continued to develop major new schemes in recent years, including Hamburg and Mall of the Netherlands, Rouget said the current strategy is based on the phased expansion of its existing projects, using the retail centres as the catalyst for urban regeneration across asset classes.

The Hamburg scheme consists of retail, dining and leisure, apartments, offices, three hotels and a new cruise terminal, connected to the city via its own metro station and located on the river Elbe on former industrial ground. The shopping centre is 95% let, and a third of the circa 130 retailers are new to the city, plus a further 40 food and beverage units.

The retail offer is the first element of the scheme to open, with office delivery to be phased from this quarter until the end of the year and the hotel openings due to take place across 2025 and 2026.

While Rouget pointed in terms of demand and interest to the 85,000 people who visited on a Tuesday for the mall opening, he said URW is focused on the opportunities around its existing European and U.S. assets, citing its two London schemes at White City and Stratford as exemplars of the approach it is likely to take to leverage its retail centres as catalysts for phased urban regeneration.

“Ambitious projects inevitably stretch over a very long time, while I think the pace of change is ever increasing,” Rouget said, reflecting on Hamburg.

“There's a fundamental value to the right mixed-use projects, and the retail in those projects is an absolutely essential ingredient. This is what brings life.”

He added that for URW, its experience developing multiple asset classes simultaneously at Hamburg has been crucial in helping define its future strategy.

“We learned many lessons. It's a project that started in 2014, more than 10 years ago, and we wouldn't do it in the same way. We wouldn't conceive it in the same way today,” Rouget said.

“We believe a lot in mixed-use and, at the same time, I think we're even more conscious today of the difficulty and complexities of those schemes, and we're very excited about the footprint of our existing portfolio.”

Rouget said the development of Hamburg had been particularly complex because all the elements were connected and therefore needed to be integrated simultaneously while development took place against the backdrop of volatile cycles and economic parameters, including the pandemic. 

By contrast, the area around Westfield Stratford City has completely changed from when it only had the stadium and the shopping centre, Rouget said. There is student housing, hotels, offices, residential, “probably at rental levels and values that you would not have dreamed of,” he said of the phased approach.

For URW, that means the mall giant can deliver “tremendous value” at the “right risk management parameters,” Rouget said, rather than deploying huge amounts of capital for a single project developed effectively in one go, as in Hamburg.

“I have no doubt Hamburg will be successful and be an incredible asset in a very strong market. However, you see that the deviations can be major and massive,” he said. “And so this is where I say that there's a before and then after for the group, more risk-conscious and focused on the risk management as well for those type of large-scale projects.”

Westfield Hamburg-Überseequartier sits as the hub for HafenCity, now an established residential and office location, with a subway station that comes straight into the centre as well as the main plaza.

At the inception of the project, city authorities were keen for it to be open-air, but URW argued that the climate made a covered centre more practical, Rouget said. The end result is a two-level mall with large openings so that shoppers can see the sky, with an architectural roof and an emphasis on natural light. 

He said URW will use its London experiences to inform its approach around the master planning in Hamburg, stressing that both city schemes are good examples of the kind of value retail can bring to urban areas. 

“I believe our shopping centres have a very important role attracting the right people in order to regenerate surrounding areas,” Rouget said. “There's a lot of potential on the residential side, but again, the key ingredient could be retail, regenerating the high streets, finding the right sizing and the right offering in the markets in order to foster that change and ignite it.”