Westfield centres across the US are set to be shut down in the next two years, as international parent company Unibail-Rodamco-Westfield seeks to reduce its exposure to the US’ fragile economy.
The Paris-based business announced its full year earnings last week, which saw sales outperform footfall while centres were able to remain open, and said it will be implementing a program to “significantly reduce our financial exposure to the US”.
“Deleveraging is a key priority and will be achieved through a strict control of [capital expenditure], cost base and continued disposals,” chief executive officer Jean-Marie Tritant.
The business currently operates 28 centres across the US, and divested from three sites last year. It’s plan is to prepare the properties for sale this year, and then sell them off in FY22, according to RetailDive.
Moving forward, it will primarily focus on operations in Europe.
“At the end of the day, the exposure to the US will be minimal, if not zero,” Tritant said last week, according to the AFR.
The property firm will not pay a dividend until at least 2023, as it seeks to keep its liquid cash high and avoid being in a position where it needs to sell off its US assets in a hurried manner.
During FY20, URW saw total net rental income fall 26.4 per cent to €1.79 billion ($2.76 million), and saw earnings per share tumble 40 pre cent to €7.63 ($11.75).
It is unlikely this decision will have an effect on Westfield’s Australian operations, as they are owned and operated by a different property firm, Scentre Group.