EUROPE'S BIGGEST MALL OWNER BUYS WESTFIELD FOR $25 BILLION
Europe’s biggest commercial property company is to buy Westfield, the Australian company behind the UK’s two highest-earning shopping centres, in a $25bn deal that will create the world’s largest mall operator. French Unibail-Rodamco plans to roll out Westfield centres in Europe and the US. The planned tie-up comes as a growing number of people buying items online, fuelled by Amazon, which forces shopping centre operators to focus on their best assets.
However, Jaap Tonckens, Unibail-Rodamco’s chief financial officer, said shopping centres still have a future. “Especially younger people do their research on their phones and then go to malls to get what they want and to hang out with their friends and have a meal. You are talking about people wanting an experience.” Charlotte Pearce, an analyst at the retail consultancy GlobalData said the Westfield takeover would enable Unibail to benefit from expected growth of 7.2% in the UK super-mall market over the next five years to £12.3bn. “With consumers favouring destination shopping locations which appeal to shoppers’ desire for a social and lifestyle experience, and Westfield setting the bar in terms of focus on overall experience, this is a beneficial move,” she said.
Unibail’s takeover of Westfield comes after Hammerson, which owns Birmingham’s Bullring shopping centre, agreed to buy Intu, the company behind Manchester’s Trafford centre, in a £3.4bn deal last week that will create Britain’s biggest property company worth £21bn. Currently, Westfield runs shopping centres in White City, west London, and Stratford, east London, and it plans to build a third centre in Croydon, south London. The company owns a portfolio of 35 centres including sites in Italy, the US and Australia. On the other hand, Unibail runs 69 shopping centres in 11 EU countries but lacks a UK or US presence. Analysts at Morgan Stanley said: “The deal would plug the last remaining holes in Unibail-Rodamco’s European dominant positioning – now also UK and Italy – and give the group access to a high-quality portfolio in the US.”