Rich Lister Lowy cleans up $664 million in Westfield sell-off

Billionaire Frank Lowy and his family have sold their entire 7.1% stake in the Westfield Retail Trust to the tune of $681 million.

The trust is a separately listed company which was created just over two years ago to hold interests in dozens of Westfield-branded malls and to allow the Lowys to invest in larger projects, including the new World Trade Center development in New York.

Frank Lowy is estimated to be worth $5.1 billion and the Lowy family’s 8% interest in the larger Westfield Group remains unchanged.

A spokesman for the Lowy family provided little detail on why the family had sold its entire holding in the Westfield trust.

“The sale was made as part of a broader investment strategy to diversify its investments internationally,” the Lowy Family spokesman said in a statement.

“Through the Westfield Group, the Lowy Family Group retains a significant investment in Westfield’s superior shopping centre portfolio in Australia and New Zealand.”

The Lowy family’s stake was sold to UBS at $3.09 a share in a block trade after the market closed.

The sale price was discounted 9% compared to Westfield Retail Trust’s $3.18 closing price but was higher than the trust’s original 2010 listing price of $2.75.

The sell-off comes as Westfield results released this week revealed sales for Westfield’s Australia and New Zealand malls were forecast to be about 1.5% to 2% this year, which is at the lower end of analysts’ expectations.

The Westfield Group still managed to report a net profit of $1.72 billion for the 2012 financial year, an 18.3% increase from the previous corresponding period and in line with market expectations.

However, the Westfield Retail Trust reported a 14.7% decline in the net profit for the 2012 year in what the company said was a challenging operating environment.

David Gordon, executive director of corporate advisory at Bentleys in Melbourne, told SmartCompany the Lowy family’s sale was well timed.

“It’s impeccable timing because there is a level of uncertainty regarding the shopping centre’s ability to grow as retail continues to evolve,” he says.

“You have got this situation where traffic is becoming more concentrated in the very good centres and they are taking share from the other centres.”

Gordon says the ability to increase the number of shopping centres as well as expand the current centres is becoming a little bit more uncertain.

“So there’s some game-changing times ahead for shopping centres and these strategies will need to be retuned to the realities of the retail word.”