Westfield Group to Sell 50% Interest in Retail Component of Stratford City for £871.5 MillionNovember 22, 2010
LONDON: Westfield Group (ASX:WDC), APG and Canada Pension Plan Investment Board (CPPIB) today announced that WDC reached an agreement to sell a 50% interest in the retail component of Westfield Stratford City for £871.5 million to a new joint venture comprising APG of The Netherlands and CPPIB. The transaction values the retail component of Stratford City at £1,743 million. Through the joint venture, APG and CPPIB will each own a 25% indirect interest in Westfield Stratford City.
Westfield Stratford City, which is located adjacent to the site of the 2012 London Olympics, is primarily focused on the creation of a 1.9 million square foot major retail and entertainment destination, due for completion in the 3rd quarter of 2011. Today, approximately 75% of the retail area is either leased or committed.
WDC will continue to wholly own the adjacent non-retail development sites which are expected to create significant additional value over time.
“On completion, Stratford City will be a landmark world class shopping centre, joining our iconic centres such as Westfield London and Sydney,” Westfield Group Managing Director Steven Lowy AM said.
“Today’s announcement continues our strategy of creating value through the introduction of joint venture partners into our assets globally, at the appropriate time. Importantly, this transaction delivers, a year ahead of opening, the value and profit we have created through the development of Stratford City.
As a result, the Group will significantly improve its return on invested capital from the development, and will remain a long term investor, property manager and developer of this landmark shopping centre,” he said.
APG’s Head of European non-listed Property Investments, Robert-Jan Foortse said: “We are pleased to team up with CPPIB to acquire a 50% stake in Westfield Stratford City, a prime shopping centre that will be developed, co-owned and managed by Westfield which we consider one the world’s premier mall operators. We believe that with its size and location Westfield Stratford City will over time become one of the UK’s best shopping centres. With this partnership we extend the good relationship we have developed with both CPPIB and Westfield over the past years.”
Graeme Eadie, Senior Vice-President, Real Estate Investments at CPPIB, said: “We are pleased to be investing alongside our established partners APG and Westfield to acquire a high quality shopping centre like Westfield Stratford City which we believe will deliver stable cash flows and good growth prospects over the long-term. The investment is fully aligned with CPPIB’s UK real estate strategy to acquire prime retail shopping centres with best-in-class partners.”
Westfield Stratford City is the gateway to the London Olympic Park which will host the Olympic and Paralympic Games in 2012. Approximately 70% of the anticipated 10 million spectators will pass through Westfield Stratford City en route to the Park during the Games.
The centre will be anchored by John Lewis, Marks & Spencer, Waitrose and an all-digital Vue cinema and will include over 300 shops and 50 places to dine.
“Westfield Stratford City and the adjacent Olympic Precinct represent one of the most significant regeneration projects to occur in Europe,” Westfield Group Managing Director for UK/Europe, Michael Gutman said.
”We eagerly await the opening of a Westfield centre in East London and with the product we have planned and the exceptional transport infrastructure being created we expect similar excellent demand from the consumers as we are experiencing in our West London centre,” he said.
The transaction is expected to close in 2011 and is subject to the project completing and opening.
Fund manager, Henderson Global Investors is the investment management advisor to APG and CPPIB.
The Westfield Group (ASX Code: WDC) is an internally managed, vertically integrated, shopping centre group undertaking ownership, development, design, construction, funds/asset management, property management, leasing and marketing activities and employing over 4,000 staff worldwide. It has investment interests in 119 shopping centres across Australia, the United States, the United Kingdom and New Zealand, encompassing in excess of 23,000 retail outlets and total assets under management in excess of A$60 billion. The Westfield Group is the largest retail property group in the world as measured by the FTSE/ EPRA NAREIT Index.
APG provides for the collective pension schemes for participants from the education sector, the government (civil servants), the construction sector, the cleaning/window-cleaning sector, housing corporations and energy/utilities companies, amongst others. APG manages around €250 billion in pension capital for these sectors (as at 30 September 2010). APG works for more than 20,000 employers and provides for the income of more than 4.5 million participants. APG manages over 30% of all collective pensions in the Netherlands.
About Canada Pension Plan Investment Board
The Canada Pension Plan Investment Board (CPPIB) is a professional investment management organization that invests the funds not needed by the Canada Pension Plan (CPP) to pay current benefits on behalf of 17 million Canadian contributors and beneficiaries. In order to build a diversified portfolio of CPP assets, the CPPIB invests in public equities, private equities, real estate, inflation-linked bonds, infrastructure and fixed income instruments. Headquartered in Toronto, with offices in London and Hong Kong, the CPPIB is governed and managed independently of the Canada Pension Plan and at arm's length from governments. At September 30, 2010, the CPP Fund totaled C$138.6 billion. For more information about the CPPIB, please visit www.cppib.ca.
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