Brookfield Property Partners L.P. BPY
("Brookfield Property Partners" or "BPY") today announced that it has
agreed to acquire additional shares and warrants of General Growth
Properties, Inc. GGP ("GGP") for total consideration of $1.4
billion.
As a result of the acquisition, Brookfield Property Partners will
increase its fully-diluted ownership interest in GGP to 32%, assuming
the exercise of all of the outstanding warrants or approximately 28%
on an undiluted basis. Brookfield Property Partners will continue to
hold its interest in a consortium alongside institutional investors
who, collectively with Brookfield Property Partners, will own
approximately 40% of GGP on a fully-diluted basis.
"This transaction provides Brookfield Property Partners with the
opportunity to increase its exposure to one of the highest quality
shopping center portfolios in the world at an attractive valuation,"
said Ric Clark, Chief Executive Officer of Brookfield Property Group.
"As a result of this and GGP's strong organic growth prospects, we
believe that the investment will earn a return that exceeds our
target range of 12% to 15%. We are pleased that the transaction
successfully transitions our GGP investment partnership to a new
phase for the benefit of Brookfield Property Partners and its
institutional partners."
The acquisition will be funded through the issuance of $435 million
of units of Brookfield Property Partners to Investment Corporation of
Dubai and other institutional investors and $995 million of
redeemable-exchangeable units of a subsidiary of Brookfield Property
Partners to Brookfield Asset Management Inc. BAM BAM
BAMA.
For further details regarding the transaction, see Appendix "A" to
this release.
Benefits to Brookfield Property Partners
Increased exposure to one of the highest quality shopping center
portfolios in the world
The additional investment in GGP increases Brookfield Property
Partners' exposure to a premier portfolio of 123 best in class retail
malls in the United States. As a result of high quality,
credit-worthy tenants in attractive markets, GGP's malls produce over
$560 of sales per square foot and generate stable long-term cash
flows.
Enhanced organic growth profile
Over the past five years, GGP has increased same-store sales by an
average of 5% per year by improving tenant mix, rolling over leases
at market prices and increasing the occupancy of its malls.
Additionally, GGP has a redevelopment pipeline of approximately $2
billion, which is expected to earn 9% - 11% unleveraged returns on
investment.
Increased public float
Following completion of the transaction, the public float of
Brookfield Property Partners will increase by 28% ($435 million).
Brookfield Property Partners previously announced its intention to
make an offer to acquire any or all of the common shares of
Brookfield Office Properties Inc. BPO BPO that it does
not already own. If fully successful, Brookfield Property Partners'
public float could increase to over $5 billion.
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