Countries: United States
Westfield America and the Rouse Company, one of the United States' leading retail property companies, have made a joint bid of up to A$3.9 billion (US$2.55 billion) for the Hahn portfolio of 20 US regional shopping centres.
Ownership of the properties will be divided along geographic lines to provide a strategic fit with the existing portfolios of Westfield America and the Rouse Company.
As a result, Westfield America will acquire 13 centres on the West Coast for up to A$2.2 billion (US$1.44 billion) while the Rouse Company will acquire the remaining seven centres for up to A$1.7 billion (US$1.1 billion). Final price will be dependent upon the interests conveyed when the transaction is completed in December 1998.
Westfield chairman, Mr Frank Lowy AO, said the agreement was the largest transaction in the Westfield Group's history and establishes Westfield as one of the largest shopping centre groups in the US.
He said he was pleased to join with Rouse for this transaction and that Westfield had a high regard for the Rouse Company.
"We established a strong working relationship with the senior executives of Rouse and look forward to working with them on future opportunities."
The Hahn centres acquired by Westfield America consist of four in San Diego, three in Los Angeles, five in northern California and one in Washington State - for a total of 1.2 million square metres of retail space.
Upon completion, Westfield America will have interests in 37 centres with 3.2 million square metres of retail space. Twenty of these centres are in California - eight in San Diego, seven in Los Angeles, and five in northern California.
After the acquisition of the Hahn portfolio, Westfield America will have a multiple presence in six major markets in St Louis; Washington D.C.; Connecticut; San Diego; Los Angeles and northern California.
This continues Westfield's strategy of clustering regional shopping centres in major metropolitan areas to obtain market penetration. Westfield's substantial presence in these major markets will enable it to extend the introduction of its unique branding and marketing approach which has proved so successful in Australia.
When Westfield America, Inc. was listed on the New York Stock Exchange in May 1997, it owned interests in 22 centres at a value of A$2.2 billion (US$1.7 billion). Since then, it has acquired interests in a further five centres at a value of almost A$700 million (US$460 million) which, following today's announcement, takes total acquisitions since listing to A$2.9 billion (US$1.9 billion).
In terms of the impact of today's announcement on Westfield America Trust (which has a 50.8% interest in Westfield America, Inc.) the directors of the Manager of Westfield America Trust remain confident that the 1996 Prospectus forecast for 1998 will be exceeded and are confident that the acquisition of the Hahn portfolio will result in further earnings growth in the medium to long term.
Westfield's Managing Director, Corporate & International, Mr David Lowy, emphasised the significance of the deal which will have a positive impact on future earnings for Westfield Holdings, whose assets under management will increase from A$12.8 billion to A$15 billion following completion.
"The deal will provide substantial additional management and development activity, much of which has already been identified, and firmly establishes Westfield as a major player in the United States' retail property market."
The transaction is expected to be completed in stages from August to December 1998.
Westfield Group