The rise of e-commerce has been an increasing threat to the mall industry and its owners for years. Behemoth online retailers such as Amazon, Walmart, and Ebay have forever changed how people shop for, and purchase goods and services. Consequently, mall owners across the world have in many instances, united together, in order to remain profitable in an ever-changing retail industry.
The latest example of that tactic is the acquisition of the prestigious Westfield Group by Europe’s largest commercial landlord, Unibail Rodamco, for a reported figure of around $16 billion dollars. The purchase by Unibail Rodamco had been discussed among company leaders for the last four years and they recently decided to pull the trigger on one of the largest commercial real estate deals in history. Unibail Rodmamco now owns many premier shopping centers all around the world, including destinations like New York City and London. They plan on keeping the top performing malls exactly how they are, while selling off the malls that are performing at the bottom of the company.
When the patriarch of Westfield, Frank Lowy, was asked how he felt about the acquisition, he responded with the following “Assets I’ve spent my life building, I could not imagine a better home for them than in this new company”. Looking at the current state of the mall industry and Westfield’s recent revenue, Frank’s joyous attitude towards the acquisition is well understood. His son, Peter Lowy, Co-CEO at the time of the merger was also quoted – saying to the Wall Street Journal: “Westfield always was dominated by the family, but it was never meant to be one of those dynasties to be handed down.”
Unibail Rodamco’s strategy to remain profitable and stable as a commercial real estate, landlord, is to improve upon the quality of entertainment that is available when shopping at the mall. In order to remain competitive against eCommerce, going to the mall must deliver an engaging experience that keeps people coming back with their families to spend their hard earned money.
With the one of the largest commercial real estate acquisitions behind them, Unibail Rodamco may face a tough battle ahead against the world of eCommerce, however they have an impeccable professional track record, and if any company can overcome the odds and remain successful, it would be them.