AMP and Westfield Trust in $555 million, 3-property transaction

13 November 2001

Countries: Australia

Long-term partners in shopping centre ownership, AMP HendersonGlobal Investors and Westfield Trust, have reached in-principleagreement for a $555 million transaction involving three of NSW’skey retail assets.

Under the terms of the agreement:

  • AMP Life’s Statutory Fund No 1 will sell its 50% interest inthe Westfield Bondi Junction shopping centre to Westfield Trust(which owns the remaining 50%) for $122 million;
  • Westfield Trust will acquire the Centrepoint complex in theSydney CBD from AMP Life’s Statutory Fund No 1 for $252.8 million;and,
  • AMP Life’s Statutory Fund No 1 will acquire a 50% interest inWestfield Liverpool in Sydney for $180 million, with WestfieldTrust retaining the other 50%.

Rob Morrison, Director of Property, Asia Pacific, for AMPHenderson, said he looked forward to a successful conclusion of thetransaction which is in line with the investment strategy of AMPLife’s Statutory Fund No 1 (SF1), which owns the properties.

He noted the SF1 fund has a strategy to alter the balance in itsproperty portfolio to provide a better blend between large assetsand smaller, more liquid assets. AMP Henderson also plans over timeto change the emphasis on growth assets toward a more balancedsplit between growth and yield.

He said the acquisition of a 50% interest in Westfield Liverpoolwould provide the SF1 fund with exposure to a high quality regionalshopping centre with development potential and located in a growtharea. Westfield Liverpool is a major regional centre in south-westSydney, comprising 69,000 square metres of retail space, and enjoysa strong trading position. The asset has the potential to providefurther strong performance.

Westfield Managing Director Steven Lowy said he was pleased withthe transaction, which will be accretive to Westfield Trustunitholders and strengthen the portfolio.

He described the high profile Centrepoint complex as one ofSydney’s best-located and busiest retail centres and said Westfieldwould introduce its traditional branding to the 13,000 square metreretail area when it assumed management.

The office component of the complex comprises 27,800 squaremetres over 10 levels, most of which is occupied by the AustralianTaxation Office on a long-term lease.

Mr Lowy said Westfield Trust welcomed the opportunity toincrease its investment in the Bondi Junction centre, which willundergo a major redevelopment expected to start early nextyear.

The redevelopment will transform the existing site, whichincludes three separate retail centres, into a fully-integrated,modern retail and community facility to serve the high-income tradearea of Sydney’s eastern suburbs.

The total capital outflow for Westfield Trust as a result of thethree transactions, including costs, will be approximately $210million. This will be funded by an equity issue to institutions of$200 million which has been underwritten by UBS Warburg andDeutsche Bank and the balance by debt.

Mr Morrison and Mr Lowy said the successful completion of thetransaction marks not only a significant deal in the Australianproperty market but also the continuation of the strongrelationship between the AMP and Westfield groups.