An Australian company has agreed to sell one of Indiana's largest shopping centers to Connecticut-based Starwood Capital Group Global LLC. Westfield Group LLC's more than $1.6 billion deal involves the Southlake Mall in Hobart and six other U.S. properties. September 16, 2013
SYDNEY, AUSTRALIA – The Westfield Group (ASX: WDC) today announced it has entered into agreements to divest seven non-core shopping centers in the U.S. to a Starwood Capital Group controlled affiliate for US$1.64 billion.
Westfield Group Co-CEO Mr. Peter Lowy said “Today's announcement continues the implementation of our strategic plan which positions WDC to generate greater shareholder value.”
“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.”
The non-core assets involved in this transaction are as follows:
Center Name Location Lettable Area (sf)
Belden Village Canton, OH 826,140
Capital Olympia, WA 779,268
Franklin Park Toledo, OH 1,261,954
Great Northern North Olmsted, OH 1,184,733
Parkway El Cajon, CA 1,319,739
Southlake Merrillville, IN 1,361,168
West Covina West Covina, CA 1,180,455
Starwood will own and manage the majority interest in the centers with Westfield retaining a 10 percent common equity interest.
The transactions' value of $1.64 billion is $120 million below the book value of the assets at 31 December 2012 and in line with the book values at 30 June 2013.
Post the transactions, WDC will own and operate a portfolio of 40 centers in the U.S. with average annual specialty sales of $513 psf, at 30 June 2013 compared to $494 psf reported in WDC's 2013 half year results announcement.
The transactions will not impact the Group's Funds from Operation (FFO) forecast for 2013 of 66.5 cents per security and distribution of 51.0 cents per security.
The divestment is expected to have an annualised dilutionary impact to the Group's FFO of approximately 4.5 cents per security, which is expected to be mitigated by the redeployment of capital and the buy-back of WDC securities.
The transactions are expected to close in the 4th Quarter of 2013.
The Westfield Group (ASX Code: WDC) is an internally managed, vertically integrated, shopping centre group undertaking ownership, development, design, construction, funds/asset management, property management, leasing and marketing activities and employing approximately 4,000 staff worldwide. The Westfield Group has interests in and operates one of the world's largest shopping centre portfolios with investment interests in 99 shopping centres across Australia, the United States, the United Kingdom and New Zealand, encompassing around 22,000 retail outlets and total assets under management of A$67.8bn.
Source: Wesfield Group LLC