The sale of the assets, which include Sprucefield, Derby and Merry Hill, is part of the group’s strategy to strengthen its balance sheet by divesting from non-core stores and redeploying the proceeds into redeveloping its more major centres. Amongst these are Westfield London, Stratford, and its redevelopment of Croydon in London. In Italy it has Milan as well as its World Trade Centre store located at Ground Zero in New York City.
On the other hand, some of the proceeds could also be put towards sweetening its merger proposal with Westfield Retail Trust (ASX: WRT), to win-over some of its more major shareholders which have indicated they will vote against the deal based on its current terms.
Westfield will recognise $1.1 billion in gross proceeds from the deal, while it is also expected to reduce gearing by 2.1% and dilute funds from operations by two cents per security.
Although the numerous divestments being made by Westfield will impact on earnings in the short-term, the company is setting itself up for a much more sustainable future as the online retail sector continues to strengthen. Trading at $10.28, Westfield shares present as a good buying opportunity today.