Westfield Corp. announced Monday it has sold five of its U.S. shopping malls — totaling more than 6 million sq. feet of retail space across four states — to help fund a property development program. The move is line with the company’s recent strategy to focus on its flagship assets, which include the new World Trade Center mall, due to open in spring 2016.
In November, Westfield sold Westfield Carlsbad mall, Carlsbad, Calif., to New York's Rouse Properties for $170 million. Combined, Westfield will realize about $1 billion in net proceeds from the two transactions, which will be used towards reducing gearing — the company’s debt as a percentage of equity capital — by 3%.
“Our strategic focus is to create and operate flagship assets in leading markets and divest non-core assets,” Westfield co-chief CEO Peter Lowy said in the statement. “Today’s announcement marks a significant milestone in our divestment strategy.”
The five malls in the transaction are Connecticut Post, Milford, Conn.; Fox Valley, Aurora, Ill.; Hawthorn, Vernon Hills, Ill.; and MainPlace, Santa Ana, Calif.; and Vancouver, Vancouver, Wash.
Westfield sold the properties to a newly formed joined venture, with Dallas-based Centennial Real Estate, Dallas as managing member, together with Montgomery Street Partners and USAA Real Estate. Westfield will retain a 20% non-managing common equity interest.
Centennial, which has a focus on revitalizing under-realized properties, said it will implement marketing and leasing efforts that align with each mall’s commitment to offer a current and unique mix of retail, dining, entertainment and special events for the local community.
“A mall can’t just be about shopping anymore,” said Steven Levin, Centennial Real Estate’s CEO. “Understanding the needs of your market is the cornerstone of creating a one of a kind experience that guests can’t get online or anywhere else.”
Westfield currently has 44 shopping malls across the U.S., Britain and Europe.