Westfield to use sale proceeds for redevelopments, buybacks

The sale of seven non-core stores will provide funding needed to continue redevelopment projects.

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Westfield Group (ASX: WDC) will reportedly reinvest the proceeds from its sale of seven US shopping centres into new developments and its share buyback program.

The group sold seven of its non-core shopping centres to private global investment firm Starwood Capital Group for around $1.75 billion. The sale of the portfolio was part of the group’s key strategy to divest from non-core assets with little development potential to instead focus on redeveloping and expanding its primary centres.

The Australian Financial Review quoted Simon Scott, head of equities research at Moelis & Company, as saying “some of the funds will be used to meet its share buyback target of 15 per cent and some will be put into its development pipeline, which includes projects at the World Trade Center, New York and Milan.”

The market reacted positively to the group’s decision, sending the shares up 1.1% on Monday before retracting slightly yesterday.

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

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