Westfield looks to Milan for mainland Europe debut

For its first project in mainland Europe, shopping centre developer Westfield is betting on Milan’s resilience to the economic headwinds that have long beset Italy. But while the city and the Lombardia region as a whole might have the potential to deliver on the expectations of the project – which was announced in 2009 – complex bureaucracy and volatile politics have since delayed its development.

The company is now hoping that the Italian government’s foreign investment committee, which has identified the project as of “strategic importance”, will finally pave the way for work to start on the development. “Certainly, the committee has given the project an impetus that has made a huge difference,” says Westfield chief operating officer Peter Miller. “It gives the power to bring together all levels of government involved, to get them to communicate and coordinate, and, eventually, to demonstrate that Italy is open for business.”

Europe’s biggest

Located in the eastern outskirts of Milan on a site formerly occupied by an old customs house, Westfield Milan will occupy 185,000 square metres in its first phase. The company, which has a 75% stake in the project (the remainder is held by Italian partner Gruppo Stilo), plans to invest up to €1.4bn in the project, creating about 44,000 jobs directly and indirectly.

With the likes of French upmarket department chain Galleries Lafayette lining up to secure space in the mall, and the Milan metropolitan area providing a pool of customers that ranks sixth in Europe for GDP per capita, Westfield believes the development can generate sales exceeding €1bn per year, in line with its two flagship centres Westfield London and Westfield Stratford City, in west and east London, respectively. “Our focus with these flagship assets is to develop them into major commercial hubs,” says Mr Miller.

After years of debate and negotiations between the company and various local authorities over areas such as transport access and job creation, Italy's foreign investment committee, which was established in 2014 to unlock the country’s potential for foreign investment, brought all the parties round the same table to coordinate a way forward.

Catalyst for Milan

Today, work on the necessary road access is under way, with Westfield assuming part of the costs. The company now plans to apply for building permits in the second half of 2017 in order to finally kick off works by year-end and have the shopping centre ready by the end of 2019 or early 2020, according to Mr Miller.

“We are working closely with all levels of government to make this project happen because we think it’s going to act as a catalyst for the development of the whole east of Milan,” he adds.

The company hopes the development will replicate the experience of Westfield London, which was at the heart of an £8bn ($9.9bn) brownfield site regeneration programme in White City, and make years of negotiations and dealing with red tape worth the effort.