SYDNEY – Westfield Group, the world’s biggest shopping-center operator, will sell seven malls in the United States – including Olympia's Capital mall – for $1.6 billion to an affiliate of Starwood Capital Group, as the company consolidates its U.S. portfolio to fund higher-return activities.
Westfield is divesting malls to redeploy capital into planned development projects, the Sydney-based company said in a statement to the Australian stock exchange. It will retain a 10 percent interest in the shopping centers, which will be managed by Starwood, it said.
Westfield, founded by billionaire Frank Lowy, is exiting properties in the U.S with lower productivity and fewer redevelopment opportunities, mostly in the Midwest and Northwest, to reinvest in higher-return assets and projects. It divested seven U.S. malls in April 2012 to Starwood for $1 billion and sold half stakes in six Florida malls to O’Connor Capital Partners for about $700 million in March, while maintaining management rights.
One of the seven malls being sold is Capital mall in Olympia, according to The Australian, a newspaper in Australia.
Westfield will own and operate 40 malls in the U.S. following the sale, and average annual specialty sales at its malls there will increase by 3.8 percent to $513 per square foot following the disposal, it said Monday.
The company has started work on the retail part of the World Trade Center in New York, in which it invested $612.5 million in a joint venture with the Port Authority of New York and New Jersey in July 2011. It is also undertaking $240 million of redevelopments in New Jersey and Maryland, it said in August.
The malls Westfield is selling include three properties in Ohio, two in California and one each in Indiana and Washington state, it said. The deal is in line with the assets’ book value as of June 30, and $120 million below their Dec. 31 value, the company said.