Westfield Bought By Europe’s Biggest Commercial Property Company

Europe’s biggest commercial property company, Unibail-Rodamco, is set to buy Westfield. The deal is worth an estimated $25 billion and will create the world’s biggest mall operator. Unibail-Rodamco already owns Forum des Halles in Paris and plans to extend the current network of Westfield centres throughout Europe and the US.

Westfield’s biggest shareholder, the Lowy family is also set to sell its share in the business for a combination of cash and shares in Unibail. The move for Westfield to sell the company comes as more consumers are choosing to shop online on sites like Amazon, forcing more retailers to streamline their services to save money.

Jaap Tonckens, Unibail-Rodamco’s chief financial officer, said there is still money to be made in shopping centres, commenting that “Especially younger people do their research on their phones and then go to malls to get what they want and to hang out with their friends and have a meal … You are talking about people wanting an experience.”

Many retailers are cutting back of the costs associated with retail outlets as they feel consumers are increasingly becoming less likely to visit. Marks & Spencer, Debenhams and Toys R Us have all made announcements this year that they will be closing stores, and other retailers have admitted they are struggling to attract customers.

The majority of Westfield’s shopping centres are currently located in the US. It’s thought that the lack of investment in recent years combined with the rise of online shopping are causing many malls across the country to close, and it’s thought that over half will close in five years if no changes are made.

Westfield currently runs two centres in London, one in White City and one in Stratford. It plans to build a third in Croydon, adding to their portfolio of 35 malls globally, which includes sites in Italy, the US and Australia. Unibail runs 69 shopping centres across Europe, and this deal will mean they increase their global presence to include the UK and US.

Analysts at Morgan Stanley said: “The deal would plug the last remaining holes in Unibail-Rodamco’s European dominant positioning – now also UK and Italy – and give the group access to a high-quality portfolio in the US.”

Charlotte Pearce, an analyst at GlobalData said the Westfield takeover would mean Unibail could see growth of around 7.2% in the next five years. She noted that “With consumers favouring destination shopping locations which appeal to shoppers’ desire for a social and lifestyle experience, and Westfield setting the bar in terms of focus on overall experience, this is a beneficial move.”

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