Westfield in $790 million four-way property transaction with Deutsche Diversified Trust

The Westfield Group today formed four new joint ventures with Deutsche Diversified Trust with the announcement of a $790 million property transaction. “This transaction expands our relationship with DB Real Estate and provides the group with additional quality shopping centres, which will have Westfield management, and further redevelopment opportunities,” said the Westfield Group’s managing director Steven Lowy.

As a result of this transaction Westfield will have investments in a portfolio of property assets totalling $34.7 billion, an increase of $668 million.

Under the transaction Westfield will:

  • acquire from DDF a 50% interest in Whitford City shopping centre in Perth, Western Australia, for $184.5 million at a property yield of 7.0%. Westfield will also acquire a 50% interest in an adjacent bulky goods property for $8.0 million at a property yield of 9.0%.
  • acquire from DDF a 50% interest in West Lakes Mall in Adelaide, South Australia, for $122.5 million, at a property yield of 7.4%.
  • acquire from DDF a 50% interest in Plenty Valley Town Centre in Melbourne, Victoria, for $10.25 million at a property yield of 8.0%. Westfield will also acquire a 50% interest in the adjacent parcel of land for $8.75 million.
  • sell to DDF a 50% interest in its North Lakes shopping centre and adjacent land in Brisbane, Queensland for $61 million at a property yield of 7.25% for the centre.

As a consequence of this transaction, Westfield will outlay $273 million (before acquisition costs), which will be funded from the group’s existing debt facilities. At the completion of this transaction, Westfield’s gearing is forecast to be approximately 42.7%.

Whilst the transaction is accretive to earnings it will have no material effect on the distribution forecasts for the periods to June 2006 as contained in the Explanatory Memorandum issued to investors in May 2004 as part of the merger of Westfield Trust, Westfield America Trust and Westfield Holdings Limited.

“We are pleased with the outcome of this transaction as Whitford City and West Lakes Mall are quality shopping centres in established metropolitan markets of Perth and Adelaide,” said Steven Lowy.

“Plenty Valley Town Centre represents a rare opportunity to acquire a small centre on 50 hectares of land in one of Melbourne’s major growth corridors with significant development opportunities in the future.”

This deal expands the Westfield and DB Real Estate relationship to seven joint ventures which include three existing joint ventures in Westfield Miranda, Hurstville and Mt Druitt, all in Sydney, New South Wales.

Settlement of all properties is anticipated to take place on 20 August 2004 with the exception of West Lakes which is expected to settle on 31 March 2005 in line with the anticipated completion of the current development.

Source: Westfield

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