February 29, 2024 #1 Local News, Forum, Information and Event Source for Venice Beach, California.

French-Based Owners of Westfield Mall Chain to Sell American Properties

Unibail-Rodamco-Westfield looking to sell 24 properties

French company, Unibail-Rodamco-Westfield (UWR) is going to sell all of its mall properties in the United States to concentrate on their European properties. The 24 malls will be sold over the next two years. 

Jean-Marie Tritant, the chief executive officer of URW said during a stockholder meeting, “We will strengthen our core business by completing our deleveraging plans to emerge as a focused European pure-play. Deleveraging remains the key to unlocking future value, and we are progressing in our clearly defined disposal plans. We are positioned to execute on the radical reduction of our financial exposures to the U.S. over the course of 2022 and 2023.” as quoted by Spectrum News. 

Paris-based URW has made this commitment as the retail shopping business in the United States has finally started to rebound slightly after two years of the pandemic. Online retail sales have gone up in comparison to in-person retail sales because of fears of Covid 19 and the customer’s rising preference for online shopping and home delivery. 

Retail stores and shopping centers have been some of the businesses most impacted by the pandemic. Lockdowns, stay-at-home orders and Covid fears have made customers more comfortable with shopping from home. Among many customers, online shopping has become the go-to option rather than a fallback. 

Even before the pandemic, malls were already suffering from a lack of foot traffic, so the coronavirus emergency just made an already tenuous situation worse. Because malls were already in trouble, commercial real estate experts are not surprised by URW’s decision. Mall owners had already started to move to a model based on mixed-use residential, office or hotel-based retail locations in the last several years. 

The 24 URW locations are spread out over the states of New York, Florida, Illinois and New Jersey. URW’s Westfield Malls in California are among the most well-known malls in the area like the Westfield Century City, Westfield Santa Anita, Westfield Topanga and The Village in Canoga Park. 
URW has over 85 shopping centers worldwide, some office buildings and a convention center and exhibition business. Their full portfolio is estimated to be worth $54.5 billion. 

The company had also invested in its mall holdings to reposition them as mixed-use properties or to increase the amenities available to potential shoppers to compete in the new market. Westfield upgraded the Westfield Century City to the tune of $1 billion in 2017. Ambiculture Advisors managing principal Jennifer Taylor said that this move from URW to divest from the US Market was not a surprise.

Taylor said, as quoted by Spectrum News, “I know the narrative out there is e-commerce killed retail; no, it wasn’t. It was over-retailing that killed retail. They are performing better in Europe than in the U.S.”

In Europe, per capita, the average retail space is 4.5 square feet, but in the United States, the average retail space per capita is 24.5 square feet or 8.5 billion square feet of retail space. David Greensfelder, founder, and managing principal at Greensfelder Real Estate Strategy said, as quoted by Spectrum News, “Retail is demand-driven. We have more retail space than we need.”

However, Greensfelder said that doomsaying about URW being a victim of a “retail apocalypse” might be overblown, that there will most likely be a demand for the assets that URW is selling off.  

Greensfelder added, as quoted by Spectrum News, “All of these shopping centers tend to be really well-located. These properties have a lot of redevelopment potential. There’s going to be a scramble for those. You’re going to see the highest-profile owners of malls go after those. It’s an opportunity to scoop up great malls that have stood the test of time.”
Taylor stated that this is an excellent time to reposition the properties in a way that would resonate better with the shoppers of today. “I think this is a great opportunity for developers and consumers. You get the opportunity to reposition something relevant today post-pandemic. It’s a great way to press the pause button and figure out the highest and best use of these massive pieces of real estate.”

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