Westfield To Invest $800 Million in World Trade Center
Westfield Group, Australia's largest shopping mall operator, has entered an agreement with the Port Authority of New York and New Jersey to invest $800 million in New York's World Trade Center's retail space.
Westfield would acquire the Port Authority's 50 percent stake, granting the group 100 percent ownership of the retail project after the deal, the company announced.
"This is a great addition, and it's the type of asset and location that sits neatly with Westfield's strategy," Tony Sherlock, Sydney-based head of property research at Morningstar Australasia Pty, told Bloomberg
. "There's not much risk to this project, and if you want valuation upside, you want it on your balance sheet, not someone else's."
In September, Westfield sold seven "non-core" U.S. shopping centers
as part of a plan to redeploy capital to assets with higher return.
Westfield first acquired the 99-year lease interest in the World Trade Center's retail space about two months before it was destroyed in the Sept. 11, 2001 attacks. The group sold it back to the Port Authority in 2003, Bloomberg
reports. In July 2011, the group entered an agreement with the Port Authority, paying $612.5 million to take a half stake in the project to develop the center.
"We have greatly valued our long standing relationship with the Port Authority, and will continue to work in close collaboration for the successful realization of the overall project." Peter Lowy, Westfield Group co-CEO, said in the announcement. "Now, we look forward to 2015 and celebrating the distinctive character and vibrancy of this great city, while introducing Westfield World Trade Center."
The latest acquisition brings Westfield's total investment in the World Trade Center to more than $1.4 billion, the group said.
The retail project includes approximately 365,000 square feet of retail space, with another 90,000 square feet of retail space expected in the future. The initial phase is due for completion in 2015. Some retail space is found in 4 World Trade Center, which opened last month
. The tallest building in the U.S., 1 World Trade Center
, is set to open in January.
Westfield has assets under management totaling A$65.8 billion, the group said. Its global portfolio includes Westfield London; Westfield Stratford City, adjacent to the site of the 2012 Olympic Games in London; Westfield San Francisco Centre, Westfield Century City in Los Angeles and Westfield Garden State Plaza in Paramus, New Jersey, among others.