Absentee Landlords Never Went AwayPosted: February 21, 2012
Capital Shopping Centres Group owns 14 of the UK’s biggest shopping malls, those private destinations with vast car parks and the same store chains. From Renfrew’s Braehead in Scotland to The Glades at Bromley in Kent, from St David’s in Cardiff to Chapelfield, Norwich, Capital’s shopping centres are the new, privatised urban centres.
The Metro Centre in Gateshead and Eldon Square in Newcastle, in North East England, are both owned by Capital. Going into Newcastle by bus from Ryton last week, the route was via the Metro Centre. Lots of roads, flat-pack style architecture, the big chains like Debenhams, Marks & Spencer, House of Fraser, Argos. Fashion chains including Bhs, Next, Primark, River Island, Zara. The merchandise looks similar wherever you are in the UK. The shoppers show remarkable conformity in dress: water-resistant zipper jackets, body-warmers and fleeces in sombre colours; blue jeans, black trousers; hoods and woolly hats. It’s almost as if every shopper brought their clothing in the same store.
Shopping centres offer jobs, but no more jobs than if they did not exist. People spent money before shopping centres were created, and the arrival of a new mall does not increase the total household income in the catchment area. Some individuals benefit, if they move from unemployment to employment in one of the new shops, but they are counterbalanced by those whose jobs disappear as shoppers switch their spending from high streets to mega malls.
“The chain stores are cheaper,” some shoppers may say, as they desert their local independent stores. That cheapness comes at a heavy price, though. The profits made by national retailers flow away from the towns and cities where most stores are located, to the shareholders. Some of the profit will drip back in the form of pensions and dividends provided by institutional investors like insurance companies and unit trusts, but lots of shoppers don’t have investments or a pension. Local manufacturers often lack the capability to supply the volumes required by the big chains, or to undercut foreign suppliers whose workers receive far less than the UK minimum wage.
At Capital Shopping Centres Group, landlord for the national chains in 14 malls, profits also flow elsewhere. The major shareholders, according to Morningstar today, February 21st 2012, are John Whittaker, owning 20.1%; Tokenhouse Holdings (IOM) Ltd (20.07%); Donald Gordon Family Interest (10.73%); and Coronation Asset Management (10.21%).
Mr Whittaker, a billionaire and philanthropist who comes from a family of textile mill owners, built up the Peel Group, which was the force behind the Trafford Centre in Greater Manchester. Capital bought the Trafford Centre in January2011, and Mr Whittaker gained a seat on the board. The Peel Group describes itself as a “leading infrastructure, transport and real estate investment company”; owns the site in Salford to which much of the BBC has relocated; and is controlled by Tokenhouse Holdings (IOM) Ltd. Tokenhouse, owner of 20.07% of Capital, has its registered office at Billown Mansion, Mr Whittaker’s home on the Isle of Man, which is of course a noted tax haven.
Coronation Asset Management, owner of 10.21% of Capital, is an investment firm based in Cape Town, South Africa. Donald Gordon Family Interest is an investment entity from South Africa. Sir Donald Gordon, a citizen of the UK and South Africa, founded the Liberty Life insurance company in South Africa and the Liberty International property and shopping centres business in the UK. Liberty International plc demerged its London assets in 2010 and the shopping centres outside London became Capital Shopping Centres Group, of which Sir Donald is life president. Like Mr Whittaker, he is a billionaire and is a serious philanthropist.
Despite the philanthropy, I cannot see the onward march of shopping centres owned by distant investors as a solution to local economic decline. For an economy to regenerate, there have to be spaces where ingenuity and invention can flourish, and I wonder how often that is possible in a privately owned, standardised town centre or shopping city? Are we facing a new era of domination by absentee landlords and business owners, when money is funnelled out of localities instead of circulating within them?
More than any other part of the UK, North East England needs to stop money leaking out. The region has the highest unemployment rate, 11.2% for October-December 2011. That’s more than one person in nine needing a job but not finding one.