On top of the shops
13 December 2004
14 April 2014
7 October 2013
21 July 2014
16 December 2013
15 August 2014
Polly Joseph should probably buy shares in Anadin. After all, as the sole corporate counsel for Westfield Shoppingtowns she is facing a rather large and complicated legal headache caused by the group’s bid to acquire property giant Chelsfield. It is one of the largest retail property deals of the year.
This is a big leap for the retail centre owner and operator. Until four years ago, when Westfield first entered the local market with the acquisition of the Broadmarsh retail centre in Nottingham in May 2000, it was virtually unknown in the UK.
But the company has made quite a splash in the local market and is on the verge of almost doubling its UK investments (the group currently owns seven retail centres in the UK) through its involvement in the £585m takeover of Chelsfield. Like most things relating to the company, what Westfield does, it does big.
As part of the deal, which has seen the Westfield Group team up with fellow Australian property giant Multiplex and UK property investors the Reuben brothers, Westfield will gain the Merry Hill retail centre near Birmingham, the Broadway centre in Bradford and the Sprucefield centre in Lisburn, Northern Ireland.
The group will also receive a 25 per cent interest in both the mammoth White City retail centre development in West London and the Stratford City mixed-use development in East London.
While the buyout is an enormous coup for Westfield, it has meant that Joseph has been suddenly swamped with work. And the legal headache has been made worse by the fact that she runs Westfield’s UK in-house legal functions on her own.
Joseph’s calm exterior, however, does not altogether disguise the mounting pressure she is facing. Getting the Chelsfield deal right means that Westfield’s global portfolio will increase by A$3bn (£1.21bn) to A$39bn (£15.67bn).
It is no wonder, then, that Joseph is keen to recruit some assistance. The company is currently advertising for a real estate specialist, a construction specialist and one or two paralegals to bolster the UK legal team.
But despite being under such pressure, Joseph is not about to settle for anything less than the very best from her new staff. And her list of requirements remains extensive.
First, applicants must be five years’ qualified for the real estate position and three years’ qualified for the role of construction lawyer. Second, they must have “a commercial approach” which means they must be able to provide practical advice to the business’s managers. But most importantly, they must have the more intangible qualities of being innovative, proactive and responsive.
“I’m looking for people with a good understanding of the business, as they’ll have to report to the business’s directors,” Joseph explains. “I don’t want people to sit on the fence, I want proactive advice, and if they understand the business that shouldn’t be a problem.”
Joseph explains that her demand for innovation is drawn from the fact that much of the work handled by Westfield and its in-house legal team is innovative for the UK retail property industry.
For example, within Australia Westfield is a well-recognised brand for shopping centres. Ask any Australian and they will probably be able to name a handful of Westfield centres.
Joseph is now working through the legalities of introducing similar branding to Westfield’s centres in the UK, starting with the Eagle Centre in Derby, which is poised to expand next year as the group’s first UK construction project.
“Our product is slightly different from other landlords in that we employ a more diverse tenant mix and introduce new concepts, like the international food court that we’re introducing from Australia, where there’s a range of different food providers in the one location,” says Joseph.
As such, a lot of Joseph’s time is spent overseeing the tailoring of standard leases and contracts to the company’s own innovative approach – for example the inclusion of shorter leases.
Another issue threatening to cause the in-house team concern is the introduction of property investment funds (PIFs) – or real estate investment trusts (Reits), as they are otherwise known. The Australian form of Reits are an important funding and investment tool for Westfield, and the group would be keen to use a similar investment structure in the UK. However, Joseph warns that it is unlikely that the current structure proposed by the UK Government will offer the same level of flexibility, subsequently forcing an increasing number of investment funds offshore.
So although Westfield is looking to bolster its UK legal team, Joseph is wary of expectations that the team will have the time to take much of the work that is currently outsourced back in-house. She explains that this is because her (and her soon-to-be-formed team’s) primary role is strategic management and risk assessment rather than day-to-day legal work.
The majority of the group’s project work, then, will continue to be outsourced, with the exceptions of any issues that are commercially sensitive. On such matters, Joseph works closely with the Australian head office, particularly with regards to the company’s tax, structuring and funding.
“I’d expect that some elements will come in-house because in-house lawyers are often more reactive,” Joseph claims, “but the business will always need external advisers to work on routine matters and larger transactions, because there’s no value of having that large a team in-house.”
|Sector||Retail property management and investment|
|Turnover||A$1.46bn (£590m) groupwide; A$59m (£23.7m) in the UK|
|Employees||220 in the UK and 4,000 globally|
|Legal Counsel||Polly Joseph|
|Reporting to||Sydney-based group legal counsel Simon Tuxen and UK chief operating officer Michael Gutman|
|Main law firms||Beachcroft Wansbroughs, Berwin Leighton Paisner, Denton Wilde Sapte, Freshfields Bruckhaus Deringer, Macfarlanes, Nabarro Nathanson and Skadden Arps Slate Meagher & Flom|