Westfield America Trust and Prudential plc announced today that they have entered into a letter of intent for Westfield America to acquire a 50% interest in Fashion Square Sherman Oaks, Los Angeles, for US$67 million from a US affiliate of the United KingdomÂ's Prudential plc.
Fashion Square is a regional mall with significant redevelopment potential, located in the heart of the San Fernando Valley and serving a primary trade area of 700,000 with a household income 35% above the LA average.
The letter of intent also provides for a US affiliate of Prudential plc to acquire up to a 50% interest in Westfield AmericaÂ's Garden State Plaza, in stages: an immediate 25% interest with a value of US$193.8 million; a further 15% interest for US$116.3 million will be purchased between May 2004 and May 2005 for a combination of cash and mortgage debt; and, an option for up to an additional 10% interest, for US$77.5 million, also exercisable between May 2004 and May 2005 for a combination of cash and mortgage debt.
The book value at December 2001 of Westfield AmericaÂ's original 50% interest in Garden State Plaza was US$336 million which was increased to US$706 million following the recent acquisition of the remaining 50% interest as part of the Rodamco North America transaction. This compares favourably to the assessed value for the sale of US$775 million. 'Following the sale to Prudential our remaining interest in Garden State Plaza represents the single largest investment in our US portfolio and this transaction provides us with additional cash resources for further expansion in the US,' Mr Lowy said.