Australian mall giant Westfield Group has plans to dispose of about $1.2 billion in U.S. mall properties, according to The Sydney Morning Herald, following in the footsteps of peers General Growth Properties and Simon Property Group.
The revelation came at the the end of Frank Lowy's last annual general meeting as Westfield's executive chairman, after 51 years at the helm. According to the article, Lowy said that the firm has already identified 10 malls that will be for sale, a number of them in California. That doesn't mean Westfield will cut all ties to the centers, however. In certain cases, it is reportedly looking to put the properties into 50/50 joint ventures. Potential partners might include the Blackstone Group and Morgan Stanley.
It's another confirmation of the shakeout occurring in the regional mall sector. Regional malls weathered the Great Recession better than most other retail property types and remained poised to do well. But its likely that only the best malls will do well. Lesser malls may need to be redeveloped or repurposed entirely. This could be why Westfield--along with other regional mall REITs--are so openly talking about cutting back on their portfolios.