By Tom Bill
LONDON Jan 23 Britain's largest listed property
company Land Securities has agreed a deal with internet
search giant Google to drive business to its shopping
The move is the latest initiative by a retail landlord to
combat the growth of online shopping. Capital Shopping Centres
Group announced this month that it is to invest in free
wi-fi networks at its malls and open a fashion website through
which shoppers can buy and collect goods from its centres.
The Land Securities tie-up with Google Product Search comes
as the number of its retail units in administration - including
Jessops, HMV and Blockbuster - rose from 1.8 percent at the end
of September to 2.2 percent, the company said in a trading
update on Wednesday.
The company will open its Trinity Leeds mall in March - the
UK's only new mall this year. The mall is 90 percent pre-let and
Land Securities Chief Executive Rob Noel said he was confident
of success despite the weak retail climate.
"Retail is not dead. Retail is changing," he said. "There
are 60 million people in this country that need to eat and wear
T-shirts, and they have to get them from somewhere."
Against the backdrop of a growing number of retail failures,
the British online market grew 14 percent in 2012, according to
online retail industry body IMRG, which forecasts 12 percent
growth to 87 billion pounds ($138 billion) in 2013.
"Some property companies were cynical about online, but more
are taking their first steps get in front of the changes," said
J.P. Morgan real estate analyst Harm Meijer.
Retailers increasingly view their stores as showrooms where
customers can see and touch items they prefer to buy online,
Meijer said. "That means landlords will have to think carefully
before linking rents to turnover as they commonly do."
The deal with Google, which will allow shoppers to see if
items are in stock, taps in to the changing habits of mall
visitors, said Richard Akers, managing director of retail at
"They will know they can get what they want and plan their
day around a meal and a trip to the cinema," he said.
The company recently upped its stake to 54 percent in the
X-Leisure Fund in a bet that Britons will still spend money
enjoying themselves during the downturn. X-Leisure has 17
leisure and entertainment venues in the UK, including skateboard
parks, climbing walls and snow slopes.
"Go back to the last downturns of the 1970s and early 1990s
and leisure spend has always been remarkably resilient," Noel
said. "Yields are also high (at more than 6 percent)."
Elsewhere in the Land Securities portfolio, insurer RSA
leased four floors in the so-called Walkie Talkie
skyscraper in London's financial district.
The deal highlights the changing nature of the market in the
area, where banking and finance companies have retrenched while
insurers seek new office space.