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Westfield Parent Eyes Exit From U.S. Mall Business

Shopping center giant Unibail-Rodamco-Westfield is planning to sell its U.S. retail holdings starting as soon as next year.

The company owns 27 American malls, with a heavy concentration in California complemented by properties in Florida, New York, Maryland and other states.

Unibail-Rodamco-Westfield's Westfield San Francisco Centre

URW unveiled its intentions during its most recent earnings report but didn't release an exact timetable for any sales nor any other details of its plans. The company also operates retail at a number of the largest U.S. airports, including Los Angeles International, Chicago's O'Hare and JFK in New York. It isn't clear whether they will also be on the market.

Almost all of URW's U.S. malls are branded Westfield, mostly acquired by the company of that name when it was an independent Australian entity. In 2017, Paris-based Unibail-Rodamco acquired Westfield for nearly $16B in cash and stock. It has sold some of its noncore assets since then but hasn't undertaken a disposition on the level of exiting the U.S.

URW CEO Jean-Marie Tritant said he is optimistic that next year will be a better time to sell malls. The company is anticipating a post-pandemic economic rebound.

"We are implementing a program to significantly reduce our financial exposure to the U.S. when the investment market reopens, which should happen with the U.S. economy rebound in 2022," Tritant said in a statement on Wednesday. "Our continued access to credit markets and ample liquidity will allow us to complete our deleveraging objectives." 

The company reported a sharp drop in net rental income between 2019 and last year. In 2020, its retail properties generated rental income of about $2B, down from nearly $2.8B in 2019, a decline of almost 26% year-over-year. It also reported a net profit drop of about 40% over the same period.

"With restrictions in place across almost all of our markets we have realistic expectations for 2021, but are encouraged by the way footfall and sales bounced back strongly whenever restrictions were eased or lifted last year," Tritant said.