Shopping giant Westfield to split mall empire
Sydney (AFP) - Australian shopping centre giant Westfield Group on Tuesday announced plans to split its international and Australian assets in a reshaping of its global empire designed to unlock more value for investors.
Under the restructure, its Australian and New Zealand businesses -- with interests in 47 malls -- will be merged with those of Westfield Retail Trust, which was spun off from the main company in 2010.
The resulting US$26 billion entity, named Scentre, will be listed on the Australian stock market, with a development pipeline for projects worth some US$3 billion.
Westfield Group will be renamed Westfield Corporation with total assets of US$17.6 billion, comprising interests in 44 shopping centres in the United States, the United Kingdom and Europe.
The market reacted positively for Westfield Group, which gained 4.05 percent to close at Aus$10.78, although Westfield Retail Trust ended 0.33 percent lower at Aus$2.99.
Westfield Group chairman Frank Lowy said the company's international and local businesses had both grown in scale and quality to the stage where they could now stand on their own.
"They can each operate more efficiently, and generate greater growth and value for investors, by being independent," he said.
"The proposal represents the latest in a series of capital restructures that have maintained the success of Westfield since it was first listed in 1960."
"Our current structure has served us well, but we believe that this new structure will create more value for investors going forward."
Lowy will be chairman of both entities, with Scentre expected to list in mid-2014.
Westfield is one of the world's largest shopping centre operators, and Lowy said a purely international focus for the new Westfield Corp would allow it to be more easily compared with international peers.
Invast chief market analyst Peter Esho said the decision to split the companies would help drive Westfield's global expansion.
"I think its a clever deal -- what it allows Westfield to do is free itself up of capital and pursue international growth," he said.
