Australia's king of retail malls, Frank Lowy, sells Westfield shopping centres

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Westfield Group Chairman Frank Lowy addresses an investors briefing in central Sydney November 3, 2010. Reuters/Daniel Munoz/File Photo

The Lowy family has made its fortune through Westfield shopping centres. It’s now selling it out for $32.7 billion, with French property giant Unibail-Rodamco ready to acquire it.

The Westfield brand will be maintained and the Lowy family will still be committed to the Group’s success. The family intends to maintain a substantial investment and will keep control of Westfield's retail technology platform, OneMarket.

Shareholders will receive $10.01 in cash and shares, per share. Westfield chairman Frank Lowy has said the deal was a result of the company’s restructuring.

A day of mixed emotion

Speaking from Milan, Lowy said it was a day of mixed emotion, but was certain it is appropriate to do the deal now. He is also sure he and his sons Peter and Steven had taken the right course.

"Firstly because it's a very good price for our shareholders and also from our point of view and the company I think we want to change our roles in the world, we would rather be investors than executives,” the ABC reports him as saying. He added that their family has worked at Westfield for a combined 145 years.

John Colley of Warwick Business School told International Business Times Australia that consolidation in the retail property industry is accelerating. The professor said the industry is under severe pressure from internet selling, specifically Amazon. He added that as sales fall so do retail property prices, to the point where they turn out appealing as a discount to asset value.

Colley also offered insight on the future of the Westfield Australian office. "For this deal no doubt the new Head Office will be in Paris so the Westfield Australian office is likely to have a limited future,” he said. He believes the regional management structure is more likely to survive thanks to little geographic crossover between the two companies.

Meanwhile, Unibail-Rodamco boss Christophe Cuvillier said the deal will create significant value for shareholders. The company’s acquisition of Westfield is a natural extension of its strategy of concentration, innovation and differentiation. Westfield Corporation runs 45 shopping centres and retail precincts in the United Kingdom, Italy and the United States.

This year has seen thousands of mall-based stores shut their doors across the US. Such move resulted in job losses, with the retail industry losing an average of 9,000 positions a month this year, according to latest data from Bureau of Labour Statistics.

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