Westfield Group to axe 3 more stores

The shopping centre giant’s strategic divestments continue, this time in the UK.

| More on:
a woman

Shopping centre behemoth Westfield Group (ASX: WDC) has entered into a conditional agreement to sell its interests in three UK shopping centres to Intu Properties for a total of £597 million.

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.

Foolish takeaway

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.

Wondering where you should invest $1,000 right now?

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for over ten years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes could be the five best ASX stocks for investors to buy right now. These stocks are trading at near dirt-cheap prices and Scott thinks they could be great buys right now.

*Returns as of January 12th 2022

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

More on ⏸️ Investing