Joint voice for retail tenants unlikely, says Westfield

Collective bargaining had been suggested as a way for tenants to achieve better outcomes with shopping centre owners such as Westfield and Centro, and had received the endorsement of Australian Competition and Consumer Commission chairman Graeme Samuel, said Westfield retailer relations general manager Jack Hanrahan.

But so far tenants had been reluctant to try the approach, a situation Mr Hanrahan said was unlikely to change any time soon. "My gut reaction is, I just can't see it," said Mr Hanrahan, who oversees Westfield's relationship with about 10,000 tenants across 44 Australian shopping centres.

He said the 99.7% occupancy rate at Westfield centres showed tenant retailers were satisfied with current arrangements."

They can choose not to join a particular centre. It is still a transaction between two parties and both parties have the option to say no."

Mr Hanrahan was speaking to BusinessDay before his presentation on global trends in retail at the Fashion Exposed industry fair at the Melbourne Exhibition Centre earlier this week. A retail veteran who had previously advised businesses including Grace Bros, Woolworths and Darrell Lea, Mr Hanrahan earlier this year joined Westfield, Australia's largest shopping centre owner.

Westfield rental agreements are heavily weighted towards tenants paying a fixed price rather than one dependent on turnover, protecting Westfield revenue during a slowdown.

Mr Hanrahan said he had dealt with the arrangement during his time as a retailer and that it benefited tenants during an economic boom. He saw little chance of it changing despite pressure from retailers."

I don't see anything changing dramatically with the modus operandi, and how we deal with retailers," he said."

Retailers are always keen to get the best deal they can possibly get, and I think that's firmly in their sights."

Despite the decision by some retailers such as Myer to scale back their city presence, Mr Hanrahan insisted Melbourne's city centre could be a lively hub for retail.

He said Westfield had invested in central locations in major cities such as Sydney and London, where the company has spent #1.1 billion ($A2.5 billion) on a site at Shepherd's Bush. However, none of Westfield's six centres in Victoria are in Melbourne's central business district.

Mr Hanrahan recently led a group of 40 tenants on a retail tour of the US, France and Britain, where he was impressed by so-called "fast fashion" outlets.

High turnover allowed a rapid response to changing trends, he said.

LINK www.westfield.com