Westfield to Buy 50% of Brazil’s Almeida Shopping Centers for $466 Million
Westfield Group (WDC), the world’s biggest shopping-center operator by assets, has made its first move into a new market in 11 years by purchasing 50 percent of a Sao Paulo-based mall owner.
Westfield will spend 740 million reais ($466 million) on the stake in Almeida Junior Shopping Centers SA, including a direct capital investment of 400 million reais, the Sydney-based company said in a statement today. It will be the first time Westfield has entered a market since gaining a U.K. presence.
“Whilst the climate in the world financial markets is volatile at present, this transaction is in the group’s long- term investment and funding plan, and one we have been investigating for an extensive period of time,” Chairman Frank Lowy said in the statement.
The move into Brazil follows the group’s decision last year to spin off the Westfield Retail Trust (WRT) to own half of the company’s Australian and New Zealand malls, and an announcement that it was seeking new markets. Westfield said last month it is investing $612.5 million to develop the retail part of the World Trade Center in New York in a venture with the Port Authority of New York and New Jersey, even as it seeks to sell some properties in the U.S.
The joint company, which will own and operate five shopping centers in southern Brazil, will be renamed Westfield Almeida Junior Shopping Centers S.A.
“Our Brazilian partnership will become a major contributor to the earnings and development pipeline of the group,” Steven Lowy, Westfield’s co-chief executive officer, said in the statement.
Brazil’s economy grew 7.5 percent last year, the fastest in two decades, as unemployment fell to a record low in December, fueling wage growth and consumer confidence. Retail sales rose 6.2 percent in May from a year earlier as the emerging middle class lifted spending. At least 36 million of the country’s of 190 million people have risen out of poverty since 2003, President Dilma Rousseff said on June 6.
Almeida owns and manages three shopping centers in the southern Brazilian state of Santa Catarina, which has a population of 6 million, Westfield said.
BR Malls Participacoes SA, Brazil’s biggest mall owner, on Aug. 8 said it bought 70 percent of Alvear Participacoes SA, which owns four shopping centers in the southern Brazilian state of Parana. BR Malls paid 510.5 million reais for two existing shopping centers and will invest 262.3 million reais in two projects in development.
To contact the editor responsible for this story: Andreea Papuc at firstname.lastname@example.org.