Unibail-Rodamco-Westfield SE (OTC:UNBLF), the French commercial real estate company, is looking to sell off most of its U.S.-based malls after purchasing the properties four years ago for roughly $14 billion.
What Happened: The Wall Street Journal reported Unibail CEO Jean-Marie Tritant announced the timeline for shedding its U.S. portfolio in an address to the company's investors. At the end of 2021, the company valued its U.S. portfolio at $13.2 billion, at the end of last year, and the Journal reported that Unibal executives were confident they could achieve their deleveraging target even if the portfolio sells at a 30% discount of its internal valuation.
Unibal entered the U.S. market when it acquired Westfield, an Australian-headquartered commercial real estate company with properties, in 2018. The company's U.S. portfolio consists of 27 malls, most operating under the Westfield brand, with 16 of the properties based in California. Tritant told his company's investors that a sale could be achieved "thanks to the quality of our U.S. assets…and the overall strength of the recovery, which is driving occupancy and long-term lease rental growth."
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Why It Happened: The COVID-19 pandemic had a deleterious impact on shopping malls, with properties remaining closed for months while consumers shifted to e-commerce for their shopping needs.
One casualty of the pandemic was Colin Dyer's position as chairman at Unibail – he stepped down in November 2020 after activist investor Leon Bressler successfully maneuvered himself into the leadership role by insisting the company jettison its U.S. holdings in order to reduce its debt. Tritant, who became CEO in January 2021, allied himself with Bressler by insisting on a European-centric focus.
The company has been slowly ridding itself of underperforming properties, selling a 34-acre property last month for $150 million that was the former site of Los Angeles' Promenade Mall and allowing lenders to take back five regional malls last year.
Photo courtesy Westfield Mall Trumbull in Connecticut