Westfield America in A$3.9 billion U.S. shopping centre transaction
06 April 1998
Countries: United States
Westfield America and the Rouse Company, one of the UnitedStates’ leading retail property companies, have made a joint bid ofup to A$3.9 billion (US$2.55 billion) for the Hahn portfolio of 20US regional shopping centres.
Ownership of the properties will be divided along geographiclines to provide a strategic fit with the existing portfolios ofWestfield America and the Rouse Company.
As a result, Westfield America will acquire 13 centres on theWest Coast for up to A$2.2 billion (US$1.44 billion) while theRouse Company will acquire the remaining seven centres for up toA$1.7 billion (US$1.1 billion). Final price will be dependent uponthe interests conveyed when the transaction is completed inDecember 1998.
Westfield chairman, Mr Frank Lowy AO, said the agreement was thelargest transaction in the Westfield Group’s history andestablishes Westfield as one of the largest shopping centre groupsin the US.
He said he was pleased to join with Rouse for this transactionand that Westfield had a high regard for the Rouse Company.
“We established a strong working relationship with the seniorexecutives of Rouse and look forward to working with them on futureopportunities.”
The Hahn centres acquired by Westfield America consist of fourin San Diego, three in Los Angeles, five in northern California andone in Washington State – for a total of 1.2 million square metresof retail space.
Upon completion, Westfield America will have interests in 37centres with 3.2 million square metres of retail space. Twenty ofthese centres are in California – eight in San Diego, seven in LosAngeles, and five in northern California.
After the acquisition of the Hahn portfolio, Westfield Americawill have a multiple presence in six major markets in St Louis;Washington D.C.; Connecticut; San Diego; Los Angeles and northernCalifornia.
This continues Westfield’s strategy of clustering regionalshopping centres in major metropolitan areas to obtain marketpenetration. Westfield’s substantial presence in these majormarkets will enable it to extend the introduction of its uniquebranding and marketing approach which has proved so successful inAustralia.
When Westfield America, Inc. was listed on the New York StockExchange in May 1997, it owned interests in 22 centres at a valueof A$2.2 billion (US$1.7 billion). Since then, it has acquiredinterests in a further five centres at a value of almost A$700million (US$460 million) which, following today’s announcement,takes total acquisitions since listing to A$2.9 billion (US$1.9billion).
In terms of the impact of today’s announcement on WestfieldAmerica Trust (which has a 50.8% interest in Westfield America,Inc.) the directors of the Manager of Westfield America Trustremain confident that the 1996 Prospectus forecast for 1998 will beexceeded and are confident that the acquisition of the Hahnportfolio will result in further earnings growth in the medium tolong term.
Westfield’s Managing Director, Corporate & International, MrDavid Lowy, emphasised the significance of the deal which will havea positive impact on future earnings for Westfield Holdings, whoseassets under management will increase from A$12.8 billion to A$15billion following completion.
“The deal will provide substantial additional management anddevelopment activity, much of which has already been identified,and firmly establishes Westfield as a major player in the UnitedStates’ retail property market.”
The transaction is expected to be completed in stages fromAugust to December 1998.