Westfield chairman Frank Lowy describes the $US25 billion ($A35 billion) sale of his shopping centre empire that also heralds his retirement as a bittersweet moment.
The company he founded and listed on the sharemarket in 1960 is to sell its 35 UK and US operations to European shopping centre owner Unibail-Rodamco in one of the largest corporate deals in Australia’s history.
Westfield’s Australian centres, which are managed by the separately listed Scentre Group, are unaffected.
Lowy will step down as chairman, but will remain an active investor, chairing an advisory board for Unibail-Rodamco that will offer strategic advice.
His sons, Peter and Steven, will retire as co-chief executives of Westfield, and only Peter will hold a spot on the board of its news owners.
The deal values the Lowy family’s stake in Westfield at more than $A3 billion.
Speaking from London, Frank Lowy told reporters that it was a day of mixed emotions, but he was “100 per cent comfortable” with the decision to sell and to step down from his position.
“For the assets I have spent my life building I could not imagine a better home for them than in this new company,” he said.
“Today is the second most important day in Westfield history – the most important day was September 1960 when Westfield was born.”
The 87-year-old recalled Westfield’s early days when it was a “humble little shopping centre in Blacktown” – which is still standing today.
“When I look back on 57 years it is more than a lifetime’s work that I have put into this company,” he said.
“It is still bittersweet for me but it is time, from a personal point of view, to move on.”
Lowy said it was the appropriate time to sell, due to the premium offered by Unibail-Rodamco to Westfield’s current market value, and because he and his sons were ready to step aside as directors and take up the role of investors.
“The most important thing is that this transaction is in the best interest of shareholders – that principle has guided my decision making since 1960 and it does so again with today’s announcement,” Lowy said.
The takeover will make Unibail-Rodamco the world’s largest shopping centre owner, with 104 shopping centres in 13 countries, all of which will now carry the Westfield brand.
Likely to be central to the deal, Unibail-Rodamco will also gain the top two supermalls in the UK – in terms of retail sales – Westfield Stratford City and Westfield London, together with Croydon’s Westfield, which is in the pipeline.
Charlotte Pearce, Retail Analyst at GlobalData said the deal will allow Unibail-Rodamco to benefit from growth in the UK supermalls market which according, forecasted to rise 7.2 per cent over the next five years, reaching £12.3bn in 2022, far outpacing that of the overall offline retail market in the UK.’
The news comes one week after property company, Hammerson, announced it had made a bid to take over rival firm, Intu, which according to GlobalData Retail, would give the combined group a stake in 12 of the top 20 supermalls in the UK. Similarly to the Hammerson Intu deal, the Unibail-Rodamco Westfield takeover will allow the combined company to benefit from cost savings but more importantly, it will strengthen its position in the global retail market and gain a broader insight into global shopping trends.
“The growth in the supermalls channel continues to be boosted by the growing number of food service and leisure options available as well as the wide number and variation of retailers,” said Pearce.
“This makes supermalls a more attractive destination for shoppers compared to local high streets and town centres because they appeal to shoppers’ desire for a social and lifestyle experience. With Westfield setting the bar high in terms of focus on overall experience, it is evident that this takeover is a beneficial move for Unibail-Rodamco.”
