Westfield Group agreed to sell seven U.S. shopping malls including its Belden Village property in Stark County for $1.6 billion to an affiliate of Starwood Capital Group LLC, as the company consolidates its U.S. portfolio.
Westfield is selling malls to redeploy capital into planned development projects, the Sydney, Australia-based shopping-center owner said Monday in a statement with that country’s stock exchange. It will retain a 10 percent interest in the shopping centers, which will be managed by Starwood.
Westfield, founded by billionaire Frank Lowy, is exiting properties in the U.S. with what it called lower productivity and fewer redevelopment opportunities, mostly in the Midwest and northwest.
Belden Village was built in 1970 as a result of an agreement between the Belden family, which owned the property, Higbee Co. and the Jacobs family. The 850,000-square-foot facility was one of the largest malls in Ohio at the time.
The Richard E. Jacobs Group sold the mall and eight other properties to Westfield in 2001 in a deal worth $765 million in cash, stock and assumed debt.
Westfield divested seven U.S. malls in April 2012 to Starwood for $1 billion and sold half stakes in six Florida malls to O’Connor Capital Partners for about $700 million in March, while maintaining management rights.
“Westfield has well flagged their intention to concentrate their U.S. portfolio,” said Louise Mylott, executive director for specialist sales, and Lou Pirenc, REIT analyst, at Morgan Stanley, in an emailed note. With this transaction, Westfield “has exited all of its Midwest assets outside the Chicago area and all noncore West-Coast assets.”
Westfield will own and operate 40 malls in the U.S., and average annual specialty sales at its malls there will increase by 3.8 percent to $513 per square foot following the disposal.
Westfield has started work on the retail part of the World Trade Center in New York, in which it invested $612.5 million in a joint venture with the Port Authority of New York and New Jersey in July 2011. It is also undertaking $240 million of redevelopments at Garden State Plaza in New Jersey and Montgomery in Maryland, it said in August.
Including Belden, the malls Westfield is selling include three properties in Ohio, two in California and one each in Indiana and Washington state.
The deal is in line with the assets’ book value as of June 30, and $120 million below their Dec. 31 value, the company said.
Starwood is an investment firm led by Barry Sternlicht.