While the Frank Lowy-chaired Westfield Corp was forced to delay a debt issue this week, it could reap about $US700 million ($755m) worth of development profits by selling down half stakes in two major US assets and getting a share of profits from a residential play next to its flagship London centre.
The shopping centre giant was forced to defer a £750m ($1.36bn) bond issue that would have been secured against Westfield Stratford City in East London due to investor debate about securitisation rules. Deutsche Bank and Credit Agricole are seen as likely to push ahead with the issue once problems are ironed out.
Westfield is tracking largely in line with the forecast given when it split into separate Australian and international companies after a bruising stoush with some local investors.
Broker JPMorgan says that Westfield’s high quality portfolio will continue to improve as it spends $US11.8bn redeveloping premium malls. The brokerage suggested that selling stakes in New York’s World Trade Centre and Century City in Los Angeles, as well as Westfield London, could provide the $US700m lift.
Investors are also tipping strong revaluations for Westfield’s best malls in the wake of Lend Lease offloading its stake in the Bluewater Shopping Centre in the UK on a tight passing yield of 4.1 per cent This is likely to see the values of the best malls worldwide increase and on JPMorgan’s reckoning about 60 per cent of Westfield’s portfolio fits the bill.
While the analyst said it was too early to make comments about a potential listing location, it said that a shift to the US was likely.