February 14, 2012 / 10:19 PM / 6 years ago

Westfield Group forms JV with Canada Pension fund on U.S. assets

SYDNEY (Reuters) - Australian shopping mall owner Westfield Group WDC.AX said it would form a $4.8 billion joint venture with Canada Pension Plan Investment Board (CPPIB) for 12 malls in the United States, freeing up cash as it seeks to expand its global reach.

Westfield ventured into new markets Brazil and Italy last year as it sought growth outside Australia and the United States while it looked to sell less productive shopping malls.

In the U.S. joint venture, CPPIB will become a 45 percent partner in a portfolio of 12 assets Westfield currently owns, Westfield said. The transaction would also generate about $1.85 billion of net cash to Westfield, it added.

“We continue to look at attractive development and acquisition opportunities globally, and are well placed to deliver long term sustainable earnings growth,” Westfield’s Co-CEOs, Peter Lowy and Steven Lowy said in a statement.

The company also announced the sale of its interest in three shopping centres in the United Kingdom for A$240 million ($256 million).

For 2011, the company reported funds from operations (FFO), an industry measure of core operating profits, of A$1.49 billion, in line with an average FFO estimate of A$1.48 billion by five analysts.

Despite a challenging retail environment at home and abroad, Westfield said it expected about 68 cents per share of FFO for 2012, compared with its 2011 result of 64.8 cents per share.

Westfield, the world’s second largest shopping mall owner by market cap, also said it would plan to start an on-market buy back of securities for up to 10 percent of its issued capital.

Westfield shares fell 18 percent in 2011, underperforming the sector index .AXPJ which fell 7.4 percent. ($1 = 0.9364 Australian dollars)

Reporting by Eriko Amaha; Editing by Lincoln Feast

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