The decision by the Paris-based real estate investment firm Unibail Rodamco to acquire Australia-based Westfield Corp. for almost $16 billion not only marks a rare, major deal in the mall space—it also bodes well for the class-A mall sector in the U.S., according to some industry analysts.
Overall, the move bodes well for class-A malls in the U.S., say Matt
Kopsky, a REIT analyst at Edward Jones, and Haendel St. Juste, managing
director and REIT analyst at Mizuho Securities USA. The deal assumes a
lower cap rate—in the mid-4 percent range—than what was implied by the
Brookfield deal, boosting valuations for the mall sector overall, which
has not seen many transactions recently. Following news of the sale,
other mall REIT stocks traded at approximately 4 percent cap rates,
Kopsky notes. “That’s a good read-through of the U.S. mall REITs,” St.
Juste says.. . . more