-- Westfield sells 49.9% stake in six Florida malls to O'Connor
Capital Partners
-- Westfield to receive about $700 million from sale
-- Shares rise on announcement
(Adds investor comment in third and sixth paragraphs, share
price reaction in seventh paragraph, background in eighth and ninth
paragraphs.)
By Gavin Lower
MELBOURNE--Westfield Group (WDC.AU), one of the world's largest
shopping center developers, will receive about $700 million after
selling stakes in six malls in Florida as part of its strategy to
take on joint venture partners and sell noncore assets.
The Australia-based company said in a statement Monday U.S. real
estate firm O'Connor Capital Partners would take a 49.9% stake in
the portfolio of six regional Florida malls, valued at $1.28
billion.
Westfield shares in Sydney rose following the announcement and
at 0332 GMT were up 2%, while the benchmark S&P/ASX 200 was up
0.7%.
Westfield has been selling stakes in its more-established assets
to raise capital for its expansion into fast-growing markets such
as Brazil, and investments in larger developments such as the
retail wing of the World Trade Center under construction in New
York.
Peter Borkovec, an analyst at White Funds Management, which
holds Westfield shares, said he hoped the company would deploy
proceeds from the sale towards high-yielding developments in other
markets such as South America and Europe.
Earlier this year Westfield's Co-Chief Executive Peter Lowy said
the company's capital management strategy included reinvesting
capital into developments offering high returns and buying back
securities.
"I feel comfortable management is sticking to their direction,"
Mr. Borkovec said.
Last year, Westfield sold off eight shopping centers in the U.S.
for $1.15 billion, with the proceeds used to pay down debt and
applied to developments that would generate higher returns. It also
entered joint ventures over 12 assets in the U.S. with Canada
Pension Plan Investment Board and sold interests in shopping
centers in the U.K.
It is also planning a development in Milan, Italy, and is
exploring opportunities in Brazil after buying a 50% stake in
Almeida Junior Shopping Centers S.A.
The company said in Monday's statement it would remain as
property, leasing and development manager of the Florida malls,
with the deal subject to financing but expected to be finalized in
the second quarter.
"This agreement carries on the group's strategy of introducing
joint venture partners into our assets globally as well as
disposing of noncore assets," Westfield's Mr. Lowy said in the
statement.
The company said while the sale would dilute its funds from
operations by about 1 Australian cent per security in 2013, the
impact was expected to be offset as it redeployed capital,
including towards its previously announced buyback of
securities.
Write to Gavin Lower at gavin.lower@wsj.com
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