Westfield Sells US Shopping Mall Portfolio

Westfield Sells US Shopping Mall Portfolio

Commercial News » North America Commercial News Edition | By Francys Vallecillo | September 16, 2013 10:37 AM ET

Westfield Group, the world's largest shopping mall operator by assets, has agreed to sell seven "non-core" U.S. shopping centers to an affiliate of Starwood Capital Group for $1.64 billion, as the company looks to redeploy their capital to assets with higher returns.

The properties involved in the sale total more than 7.9 million square feet. The portfolio includes three centers in Ohio, two in California and one each in Washington and Indiana. The transaction's value is $120 million below the book value of the assets at the end of 2012, but are in line with the value at mid-year 2013, the company said. 

The sale is part of the company's strategic plan, Westfield Group co-chief executive Peter Lowy said in statement.

"We are focused on redeploying our capital into superior retail destinations in major cities through divesting non-core assets and introducing joint venture partners into our high quality portfolio of assets," he said.

Starwood will own and manage the majority interest in the shopping centers while Westfield maintains a 10 percent common equity interest.  

Sydney-based Westfield, founded by billionaire Frank Lowy, is moving to reinvest capital into projects in the U.S. and abroad that offer a higher return. In April 2012, the company sold seven U.S. malls to Starwood for $1 billion and in March sold half stakes in six Florida malls to O'Connor Capital Partners for about $700 million, Bloomberg reports. 

"They're remixing the remaining portfolio based on their views about where the best value is going forward," Winston Sammut, Sydney-based managing director of Maxim Asset Management, told Bloomberg. "This is part and parcel of their strategy, not a change in strategy or outcome."

After the latest transaction, Westfield will own and operate a portfolio of 40 centers in the U.S. with average annual specialty sales of $513 per square foot, the company said. 

The sale is expected to close in the last quarter of 2013.  


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