Westfield Hamburg-Überseequartier retail opening delayed until Q1 2025

Unibail-Rodamco-Westfield announced that the highly anticipated Westfield Hamburg-Überseequartier will open its retail section in late Q1 2025, instead of the previously planned October 2024. The delay is due to the need for additional time to complete the commissioning phase of the project, specifically related to key operational elements like fire and life safety systems, as well as other mechanical, electrical, and plumbing systems.

This decision came after it became apparent that the project would not be ready in time for the critical Winter retail season. The company has opted to align the opening with the Spring retail calendar in consultation with its tenants. The retail component is 93% leased, with over 75% of leased tenant units either ready to open or nearing completion as of mid-September 2024.

Delays to cost Unibail-Rodamco-Westfield €100 million

This delay is expected to add approximately €100 million in costs, mainly due to the extended construction operations and compensation for tenants. Despite this additional cost, the Group’s Adjusted Recurring Earnings Per Share (AREPS) guidance for FY 2024 remains unchanged. Unibail-Rodamco-Westfield has been proactive in addressing issues, appointing a new Head of Construction and boosting its management team with additional expertise in mechanical, electrical, and plumbing systems.

In parallel, an independent investigation, led by forensic accounting specialists Accuracy and legal counsel White & Case, continues to investigate the root causes behind the project’s cost overruns and delays. While the findings are yet to be reported, the Group has already implemented stronger internal monitoring and financial controls at the project level.

Expert opinion: What this means for retail and property sectors

Delays in significant retail projects like the Westfield Hamburg-Überseequartier have broader implications for the retail and property sectors. Projects of this scale often act as catalysts for local economies, creating jobs, attracting tourism, and offering a vital platform for both established brands and new entrants. As 93% of retail space is already leased, this demonstrates strong retailer confidence despite the delay. Yet, €100 million in additional costs raises questions about the long-term financial planning of large developers. The leadership’s swift response in bolstering project management shows a commitment to ensuring high standards.

By postponing the launch until Q1 2025, Unibail-Rodamco-Westfield might face short-term challenges, but the decision to align with a strategic Spring opening should provide tenants with better foot traffic and sales potential. However, repeated delays could hurt investor confidence in the long run, particularly in a market that remains sensitive to construction disruptions and rising costs.