As many of you will know, especially those in the property industry, one of the UK’s biggest shopping centres, The Trafford Centre, is being sold to Capital Shopping Centres (CSC). Both parties have confirmed they are in talks to acquire the Trafford Centre near Manchester. Under the terms of the deal, Mr Whittaker, our original Client and the Chairman of Peel Group, would become CSC’s biggest shareholder.
CSC, owns 13 shopping centres including the Arndale, also in Manchester, and Lakeside in Thurrock, along with many others around the country. If the deal goes ahead, it is reported that CSC will fund it with £750m in shares for the Trafford Centre, which covers 1.9m square feet of retail space, and a further £75m cash contribution by Peel in return for it receiving new shares and convertible bonds. A complicated deal by any standards.
The offer from CSC values the Trafford Centre’s property assets at £1.65bn, including net debt of £750m and other liabilities of £50m. This clearly reflects the property value of the Centre, but for me, the real value has always been in the approach that has been taken by Mr Whittaker and the management team.
Many people forget that Peel Holdings had never built or run a shopping centre, let alone a regional centre of this magnitude and complexity. We (Coverpoint) were brought in very early on, working as part of the design and development team, trying to create something that had not been done before.
At one of the many design team meetings I was asked by the Retail Agents what we “hoped to achieve” with the foodservice at the Trafford Centre. Rather naively, I stated that “people will want to come out for dinner at the Trafford Centre, in the same way they go out for dinner in Manchester City Centre!”.
As you can imagine, there was a fair amount of tittering, but not from the Management team we were working with. Showing 100% conviction, we worked together to deliver the vision, when most of the operator community did not get it. One of the team who is sadly not with us any more, was Richard Bonner, from the Property team, who worked so hard to make the whole centre such a success. He is sadly missed.
The Trafford Centre, which opened in 1998, attracts 35 million visitors a year. It houses 230 shops, including Selfridges, John Lewis and Marks & Spencer, as well as 60 restaurants and bars. Operators include TGI Fridays, Cafe Rouge, La Tasca, Tampopo, Pesto, Chaobaby, Barburrito, Starbucks, Pizza Express, Rice, Nandos, Kro, Costa Coffee and many more.
When the Trafford Centre finally opened after over 2 years of construction, the Coverpoint team, along with the assembled guests, watched John Whittaker, abseil across the Orient, the restaurant and food court area.
We had been plagued by operators pulling out at the last moment, with Whitbread getting “cold feet” 9 months out from opening. It has given a great amount of satisfaction that, after over 10 years, TGI Fridays, Cafe Rouge and other brands that could not commit in those early years have scrambled to get a place in the Centre, and are invariably number one in their estate, or close.
The Centre has been so succesful in its aim, that foodservice achieves well over £80 million of gross sales a year. Some operators have been less succesful, but most have made an awful lot of money, despite the “full” rents. Further developments include Barton Square and Legoland as the site continues to evolve.
The attraction of the Centre is without question. The doubters were wrong. In fact, the Trafford Centre led the market from the day it opened. All of this from a company that had no experience of running shopping centres. The single-minded, focused approach of Mr Whittaker and his team delivered the vision in bucket loads. Even today, as we continue our work, I have bumped into “The Chairman” as he tours the centre, and he will always have time to talk about the next restaurant deal, the poor service he received in a restaurant and those that are doing well.
The Trafford Centre holds a very special place in the development of Coverpoint. It was the only project where we were truly allowed to push the foodservice vision really hard, to its slightly scary, but logical conclusion!
The result – what is believed to be the most succesful foodservice offer anywhere in Europe. This is down to many people, but it could not have been achieved without the vision of John Whittaker, Mike Butterworth, Richard Bonner and the teams that worked so hard on it.
Whats next? Who knows, but it has been fun, real fun.