MENU

Westfield fights for control over Karrinyup

Westfield Group (ASX: WDC) and its affiliate Westfield Retail Trust (ASX: WRT) are reportedly going up against the Australian Consumer and Competition Commission (ACCC) in order to take control of Karrinyup Shopping Centre, located in Perth.

The mall is valued at $620 million with a gross lettable area of 60,000 square metres and recorded $428.9 million in annual sales last year, according to The Australian. Taking control of the property would boost Westfield’s exposure to Perth’s northern suburbs.

Whilst WestArt – which is owned equally by Westfield Group and Westfield Retail Trust – currently controls one third of the centre, it is looking to take control of the other two thirds from superannuation fund UniSuper.

However, there are already two other local shopping centres under Westfield’s control – namely, Innaloo Shopping Centre and Westfield Whitford City (which is co-owned by GIC Real Estate) – which has prompted concern amongst retailers that Westfield’s market power in the local area could become too great should the ACCC allow it to operate a third centre.

Reportedly, Myer (ASX: MYR) is not objecting to the move but a number of smaller businesses, as well as competitor David Jones (ASX: DJS), are considering their positions.

The most likely solution to the problem at hand is that Westfield could be granted the right to take full control of Karrinyup on the condition that it sold its Innaloo asset, which Charter Hall Group could purchase for around $268 million. Meanwhile, another option put forward has been that UniSuper could decrease their stake in Karrinyup and take up a stake in Innaloo.

Foolish takeaway

Westfield’s exposure to the wealthy northern suburbs of Perth will be increased should the group land the right to increase its stake in Karrinyup. Whilst the company has maintained a heavy focus on strengthening its property portfolio since the global financial crisis – by divesting in poorer performing assets and expanding its more profitable stores – this move should be seen as a good sign for investors.

Are you interested in our #1 dividend-paying stock? Discover The Motley Fool’s favourite income idea for 2013-2014 in our brand-new, FREE research report, including a full investment analysis! Simply click here for your FREE copy of “The Motley Fool’s Top Dividend Stock for 2013-2014.”

More reading


Motley Fool contributor Ryan Newman does not own shares in any of the companies mentioned in this article.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss a very important event! Chief Investment Advisor Scott Phillips and his team at Motley Fool Share Advisor are about to reveal their latest official stock recommendation. The premium “buy alert” will be unveiled to members and you can be among the first to act on the tip.

Don’t let this opportunity pass you by – this is your chance to get in early!

Simply enter your email now to find out how you can get instant access.

By clicking this button, you agree to our Terms of Service and Privacy Policy. We will use your email address only to keep you informed about updates to our website and about other products and services we think might interest you. You can unsubscribe from Take Stock at anytime. Please refer to our Financial Services Guide (FSG) for more information.