Proposed expansion of Westfield 277 Broadway Newmarket.
New Zealand's biggest and most valuable collection of
shopping malls might be on the market with all nine malls
controlled by a new owner.
Shane Solly, an Auckland-based director, portfolio manager
and research analyst with institutional investor Harbour
Asset Management in the ANZ Centre, said this morning Scentre
Group -- the A$17.3 billion shopping centre trust born out of
the controversy of the Westfield restructure -- might quit
all its New Zealand shopping mall portfolio.
"There's a lot of options being considered and this is just
one of them," he said of the business which controls nine
malls here including Christchurch's Riccarton and 277 in
Harbour owns shares in Scentre Group and Solly said while he
did not know details, he considered a sale quite on the
Australian AFR share market publication, Street Talk, also
contained substantial details but said Scentre might only
sell half its New Zealand malls.
"It is understood Singapore's sovereign wealth fund, GIC and
one of Canada's biggest pension funds, CPPIB, are
frontrunners to acquire a stake, in a move that would value
the Kiwi shopping malls at about $NZ3 billion – far higher
than the current book value of $NZ2.7 billion," Street Talk
That is just a week after Westfield and its former satellite
trust, Westfield Retail Trust, won a hard-fought merger plan
that provoked opposition from some its largest investors.
"Yet this deal is expected to meet with widespread support as
the money will most likely be funnelled into early debt
repayments, and the shopping centre landlord will still
derive a management fee from running the malls. Shedding a
stake in the NZ portfolio, which accounts for close to 10 per
cent of Scentre's asset base, should also generate a higher
return on equity and free up cash for the development
pipeline," Street Talk reported.
"While the group's management, led by former Westfield chief
financial officer, Peter Allen, has wasted little time in
this new role, joint ventures had been flagged to investors,
as far back as six months ago when the Lowys and their
financiers were in the midst of campaigning for the demerger
and subsequent creation of Scentre.
"In documents obtained by Street Talk in January, the
Westfield team were already mapping out prospective sales in
flagship shopping centres, such as Westfield Sydney at Pitt
Street mall and the Bondi Junction property. At the time
sources claimed early stage discussions had already been
initiated with large-scale funds.
"If CPPIB were to prevail, the deal would mirror its
involvement in AMP's portfolio of top Australian shopping
malls in a joint $872 million transaction with the Abu Dhabi
Investment Authority. Under that transaction, the Canadian
fund acquired a foothold in major malls like the Macquarie
Centre in Sydney and Pacific Fair on the Gold Coast after AMP
and Westfield agreed to largely terminate a long-standing
Earlier this week, Unisuper, the chief objector to WRT's
merger into Scentre, shunted an extra $200 million into what
now ranks as the nation's largest shopping centre landlord,"
Street Talk said.
- By Anne Gibson of the New Zealand Herald