Australian Westfield To Own All Retail Space At NYC World Trade Center

on December 06 2013 10:06 AM
One World Trade Center Spire Raising
Iron workers photograph a crane lifting the final piece of a spire to the top of One World Trade Center in New York City. Reuters

Australian mall operator Westfield Group (ASX:WDC) will own 100 percent of the retail space at New York’s iconic and rebuilt World Trade Center, the company said recently.

Westfield, which operates globally, paid $800 million to acquire a 50 percent interest in the property from the New York & New Jersey Port Authority. It already owned the other half stake in the retail part of the property.

The company has invested $1.4 billion in the World Trade Center retail space in total. It paid only $600 million for the first half, which it bought two years ago, according to the Jewish Business News.

High profile tenants in the retail space could include Apple Inc. (NASDAQ:APPL), L Brand Inc.’s (NYSE:LB) Victoria’s Secret and Michael Kors Holdings Ltd (NYSE:KORS), though no formal announcements have been made yet.

Westfield Group co-CEO Peter Lowy expects the 365,000 square feet of retail in downtown Manhattan to appeal to tourists and New Yorkers alike, but that could cost him. If the company makes profits above a certain level, they may have to pay the Port Authority an additional one-off payment, over and above the hefty $800 million price tag. Further details weren’t disclosed.

The transaction is expected to close within the next six weeks.

Westfield owns major shopping malls in London, San Francisco, Los Angeles and New Jersey. It holds stakes in 91 shopping centers worldwide, including in Australia and New Zealand.

The company initially acquired a 99-year lease in the World Trade Center retail space in July 2001, months before the Sept. 11 attack on the World Trade Center. With the latest acquisition, retail at a historic New York landmark will be operated entirely by a foreign company, albeit one with global and U.S. expertise.

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