America’s biggest ever real-estate collapse opens door for Westfield Group

Frank Lowy’s Westfield Group is believed to be examining the assets of US shopping centre owner General Growth Properties, which collapsed yesterday with debts of $37.6 billion.

The collapse of General Growth, the second-largest mall owner in the United States, is the biggest in the history of the US real estate sector.

The company, which owns more than 200 shopping centres, has been warning that it may seek chapter 11 bankruptcy protection since November last year. Its attempts to restructure its $37 billion debt load have failed as banks and financiers flee the US commercial property sector.

“Our core business remains sound and is performing well with stable cashflows,” General Growth chief executive Adam Metz said in a statement.

“While we have worked tirelessly in the past several months to address our maturing debts, the collapse of the credit markets has made it impossible for us to refinance maturing debt outside of chapter 11.”

Analysts expect Westfield and the largest US shopping centre, Simon Property Group, to look closely at acquiring some of General Growth’s assets, where are valued at around $35 billion.

Westfield said last month it has almost $9 billion of liquidity for potential acquisitions, although it does have around $4.6 billon of development underway. The group may also face further writedowns on the value of its shopping centres if global valuations continue to fall.

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