Unibail-Rodamco has been selling smaller and less dominant assets in its European retail portfolio and reinvesting the proceeds in its development pipeline, which includes larger malls that are expected to be more resilient to the growth of online shopping.
As sales fall so do retail property prices, to the point where they become attractive as a discount to asset value.
Shareholders in the shopping centre empire will receive AUD$10.01 per share which is about an 18 per cent premium to Westfield's closing price of $8.50 on 11 December. "If you are a retailer, and you still want to have some physical stores, you want them in the best malls you can get-the malls with entertainment, food and beverage", Andrea Felsted, a retail columnist, told Bloomberg.
Westfield said it owns 35 shopping malls valued at $32 billion.
Sir Frank Lowy AC, chairman of the Westfield board of directors, said the deal with Unibail-Rodamco is the culmination of the strategic journey Westfield has been on since its 2014 restructuring.
Westfield Group spun off its Australian and New Zealand operations in 2013 and reorganized its Northern Hemisphere properties as Westfield Corp.in 2014. "Steven Lowy serves on Scentre's board", he continues. "'The extremes of the Holocaust did not melt Frank".
Westfield's portfolio includes shopping areas at United States airports such as Newark Liberty International, John F. Kennedy International, Los Angeles International and Orlando International.
"Sir Frank hit the phones, rallied investors' support and a few weeks later won approval for the demerger, creating an worldwide group, Westfield Corporation, and a local operation, Scentre".
Unibail said it had identified cost savings of £88million, including £53million from slashing corporate overheads.
"Lowy has given time and money to many other causes, including the Lowy Institute for International Policy, a think tank that focuses on Australia's place in the world, and he has donated millions to medical research in Australia".
Oh, and last Friday he was knighted by Queen Elizabeth "for his contribution to the British economy and philanthropic efforts in the country".