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| Westfield in US JV, UK sale |
   
| Westfield Topanga - part of the US deal. |
Posted Date: 15/02/2012
Westfield Group has announced a $US4.8 billion ($A4.7 billion) joint venture over 12 assets in the US with Canada Pension Plan Investment Board (CPPIB).
The company also has agreed to sell interests in three shopping centres in the United Kingdom (UK) for STG159 million ($A240 million).
"Today's announcement follows on from the strategic initiatives we have undertaken since November 2010, beginning with the establishment of the Westfield Retail Trust," Westfield's co-CEOs Peter Lowy and Steven Lowy said in a statement on Westfield.
"Since that time, we have expanded our operating platform globally and reduced our capital invested by entering into strategic joint ventures and disposals of non-core assets."
The US transaction was expected to be completed during the first quarter of 2012, Westfield said.
"These initiatives provide the group with approximately $9 billion of capital for redeployment into out higher return opportunities," Westfield said in a statement.
"These opportunities include the group's share of the $11 billion development pipeline, our recent expansion into the new market of Brazil as well as the investment in major iconic projects at Milan, Italy, and the World Trade Centre in New York."
In the US deal, CPPIB will become a 45 per cent joint venture partner in a portfolio of 12 assets in the US currently owned by the Group with a gross value of US$4.8 billion. This represents a three per cent premium to prior book value and the transaction is expected to close during the first quarter of 2012.
Said Peter Lowy: “This joint venture represents CPPIB’s largest real estate investment globally to date and we are pleased to have expanded our long term relationship with them.”
The transaction will generate approximately US$1.85billion of net cash to the group after the assumption by CPPIB of property related debt.
WDC will act as the managing general partner for the joint venture and will be responsible for property management, leasing and development. The transaction will increase the number of joint ventured centres in the US to 19, representing 50 per cent, by value, of the Group’s US portfolio.
The assets are:
In the UK, deal, WDC has agreed to sell its interest in three non-core smaller centres in the UK. The sale of its interests in Belfast (33 per cent), Guildford (50 per cent) and Tunbridge Wells (33 per cent) will result in gross proceeds of £159 million, in line with prior book value, and net proceeds of £107 million.
“These assets were originally purchased in 2000, at the time of our initial entry into the UK. Since that time we have refocused our business into iconic assets such as Westfield London and Stratford City and we continue to examine new growth opportunities in the UK. Along with the recent sale of Nottingham, these assets divested today became non-core to our UK portfolio”, Steven Lowy said. |
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