Is the Westfield Effect the New Waitrose Effect?

If you have been involved in the property market at some point over the last couple of decades, it’s highly likely that you would have heard all about the Waitrose effect. Having one of these high-end supermarkets nearby can do extraordinary thing to house prices, with some analysts estimating rises of around 12 per cent – that’s a staggering £40,000 on the average UK property!

However, it would appear that Waitrose now has some competition in the property location stakes and it comes in the shape of shopping centre giant Westfield. The newest chain of malls to hit the UK is starting to do what Waitrose did to property prices in the immediate areas wherever they spring up, which is great news for those who may have a flat or house nearby.

Where did it all begin?

Image Credit: Herry Lawford via Flickr

Westfield was originally an Australian company that began life in the late 1950s, but it was the expansion into the United States that really saw things take off for the group. Their first foray into the US market was the purchase of an existing shopping park in Connecticut back in 1977, and this project was quickly followed by three more malls: another in Connecticut and two more in California and Michigan.

The group carried on investing in the US across the 80s and 90s, but were relatively unknown in the UK until the White City shopping centre opened its doors in 2008. Westfield has, since then, followed its US strategy and invested in other areas across the UK and now has malls in Bradford, Stratford, and a brand new development in Croydon set for completion in 2019.  

How Westfield has affected property prices in the UK

Image Credit: Herry Lawford via Flickr

In much the same way as Waitrose, properties close to the new Westfield shopping centres are seeing considerable bumps in their prices. When they opened their White City branch the resulting boost in house prices around the West London area was almost instantaneous.

Rightmove, the online property search engine, said that the rate of increase in the White City area dwarfed the rest of the capital in the first year of the new centre opening. Across this period house prices rose by 12.79 per cent in Hammersmith and Fulham, as opposed to the average London property which saw just a 3.1 per cent increase.

Image Credit: Herry Lawford via Flickr

Newham, too, saw similar jumps in property prices when the Westfield Stratford centre opened its doors in 2011. The Daily Telegraph reported that property in the closest 14 postal districts around the Olympic Park site have skyrocketed by £92,000 over the last eight years.

Naturally, the buzz surrounding the Olympics and other redevelopments which have taken place in the area will have contributed to the rise as well, but the Westfield effect cannot be denied. Property investors are now looking to the Croydon venture in the hope that the market in South London sees a repeat performance.

Image Credit: Herry Lawford via Flickr

Regardless of whether it’s Waitrose or Westfield causing prices to rise, one thing to take away from this is the fact that, when it comes to property prices, location still matters.

If you enjoyed this blog post then perhaps you would like to read “UK Inflation Is Negative Again, What Does This Mean To Investors?”

Feature image credit: Aniolek via Flickr