Westfield group has announced it will enter the Brazil market through a $440 million investment in Almeida Junior – a vertically integrated owner, manager and developer of Brazilian shopping malls.
The investment sees Westfield Group become a 50 per cent stakeholder, joint owner and active partner in the company, which is to be renamed Westfield Almeida Junior Shopping Centres.
The newly formed group will own and operate five shopping centres in southern Brazil, including two currently under development.
Chairman of Westfield Group, Frank Lowy said of the partnership: “Today's announcement represents an exciting and significant strategic investment for the Group which expands our global franchise into this large and high potential market.”
Almeida Junior has been operating shopping centres and undertaking all aspects of design, construction, leasing and marketing in Brazil since 1993.
The company's founder and CEO James Almeida Junior will continue on as chief executive officer in the newly formed Westfield Almeida Junior Shopping Centres.
Almeida expressed excitement about the opportunities the joint venture would offer.
“I am very pleased to partner with Westfield, one of the world's leading shopping centre groups. Our objective is to transform our company into a leading shopping centre group in Brazil.”
The transaction means Westfield Group will now operate in five countries and grow its assets to almost $1 billion. Westfield Group has forecast an unlevered internal rate of return of at least 15 per cent on its investment.
The newly formed Westfield Almeida Junior Shopping Centres group will have a 55 per cent market share of the shopping centre space in the state of Santa Catarina by the time its two newest developments are completed, which is expected to happen by the end of 2012.
UPDATE: Westfield Group announced on Friday that it would be continuing its expansion through Milan, as well as Brazil. The group has acquired a 50 per cent stake in the fashion centre of Milan, which is to be named "Westfield Milan" and is expected to be completed by 2015.