Westfield adds to U.S. portfolio

By Geoff Hiscock
CNN Asia Business Editor

SYDNEY, Australia (CNN) -- Australia's Westfield Group will buy nine regional shopping centers in the U.S. for $756 million (Aust. $1.45 billion), it said late Wednesday.

The centers, now owned by the Ohio-based Richard E. Jacobs Group, will be bought by Westfield America Trust, which is Australia's fourth largest property trust.

The acquisition continues Westfield's aggressive push into the U.S. mall market, where it already has 39 shopping centers. The Jacobs purchase will lift its holdings to 48 centers worth $5.7 billion.

Westfield said it would issue $210 million in equity to the Jacobs Group, as well as paying it $40 million in cash and assuming $506 million of non-recourse mortgage debt.

The nine centers in six U.S. states have about 900,000 square meters of lettable area and generate annual sales of about $1.9 billion.

'Significant potential'

In a statement Wednesday, Westfield America managing director Peter Lowy said there was "significant potential" for Westfield to upgrade the portfolio through redevelopment and intensive management.

He said the deal, which would be completed in the first quarter of 2002, would add to earnings.

As well as running its existing U.S. portfolio, Westfield has been seeking to take over the management of 41 U.S. shopping centers held by Dutch-based property group Rodamco North America (RNA).

But RNA has been resisting the overtures from Westfield, which in August said it would pay $488 million for a 24 percent stake in the group.

Westfield was also the manager of the shopping center component of New York's World Trade Center, destroyed by a terror attack in September.

Founded by billionaire developer Frank Lowy in 1960, Westfield is one of the biggest shopping center groups in the world.

It has about $13 billion of assets under management in 87 shopping centers in Australia, New Zealand, the U.S. and the UK. Its Westfield Trust is the largest property trust in Australia.

Lowy, whose sons are heavily involved in the company's operations, ranks as Australia's second richest man behind media tycoon Kerry Packer, with a personal fortune of Aust. $3.5 billion, according to BRW magazine.