Retail specialist Westfield to set up construction management arm as part of UK push.

Australian retail developer Westfield Holdings is planning to set up a construction management arm in the UK.

Peter Allen, director of Westfield European, said the new division would concentrate on in-house work. This will include the redevelopment of the Broadmarsh shopping centre in Nottingham, where it will partner developer Hermes. The firm, which entered the UK market in 1998, is also strengthening its foothold through a £1.1bn deal with MEPC to buy a 50% stake in its nine shopping centres.

Industry sources said the new arm would be well placed to take advantage of changes in the CM market if it decided to go for full-blooded competition with UK firms.

Sources said that clients were increasingly looking for CM firms to offer price certainty and guarantees – and with the backing of a multimillion-pound developer, the division would be in a position to challenge leading players.

Allen said Westfield was now focusing on recruiting the right people for the venture rather than looking at acquisitions, and he insisted that there would be enough work in the UK to keep the operation busy. He said: “We feel there is a lot of potential in terms of development opportunities in the market. The way we try to make shopping centres relevant and popular to the community is to continue to refresh them. This means continual and ongoing works.”

Allen said the move was in line with the firm’s Australian and New Zealand operations. He said: “We have found a lot of benefits from having construction in-house. Everyone working together produces a better product.”

Allen said the CM operation would start within the next two to three years. He said: “It depends on when development starts. The MEPC work may be earlier than the Nottingham shopping centre. We are trying to understand the structure of the market before we finalise our plans.”

Westfield is due to produce a masterplan for the Broadmarsh shopping centre at the end of the year. One construction manager played down the Westfield move because it was essentially in-house. He said: “I would not get too excited about it.”

Westfield, set up in the 1950s by chairman Frank Lowy, is the largest listed property trust in Australia. It runs shopping centres in Australia, North America, New Zealand and Malaysia. The firm has built its reputation with in-town shopping centres rather than out-of-town schemes such as Bluewater. This fits in with government policy in the UK.