G’Day: Aussie Developer Close to MainPlace Mall Buy
By SANDI CAIN
Australia’s Westfield Holdings Ltd. is buying MainPlace/Santa Ana as part of a larger sale of U.S. holdings by the Netherlands’ Rodamco NV.
The buy is part of a $5.3 billion, 35-shopping mall deal in which Los Angeles-based Westfield America Inc., Westfield Holdings’ U.S. real estate investment trust, and two other shopping mall owners are set to buy Rodamco’s real estate and related U.S. businesses.
Under terms of the deal, which is expected to close by May 1, Westfield will take on 14 Rodamco malls, including MainPlace. Indianapolis-based Simon Property Group Inc. is set to take control of 13 malls, while Columbia, Md.-based The Rouse Co. plans to assume the other eight.
Rodamco agreed in January to a joint buyout, but a group of shareholders tried to block the deal through court proceedings in a bid to secure a more lucrative offer.
According to Catharine Dickey, vice president of communications for Westfield America, the company is set to assume both ownership and management of MainPlace once the deal closes.
Simon Property Group owns three other OC malls: Brea Mall, The Shops at Mission Viejo and Laguna Hills Mall. None of the Rodamco properties it’s picking up are in OC.
MainPlace ranked No. 6 on the most recent Business Journal list of OC shopping malls, with sales of $281 million in 2000. The mall has 190 stores and 1.1 million square feet of leasable space. It is about 90% leased, according to industry sources.
“It’s a good property,” said Tony Cherbak, a retail analyst with Deloitte & Touche LLC’s Costa Mesa office. “But it’s been somewhat lost among the Orange County behemoths like South Coast Plaza, Fashion Island and The Shops at Mission Viejo.”
Along with MainPlace, Westfield is set to take control of a mall in Century City and the Valencia Town Center, among others. Westfield already owns eight Los Angeles-area malls, including Fox Hills Mall near Los Angeles International Airport and Horton Plaza in downtown San Diego.
The eight Los Angeles malls total 6.9 million square feet of retail space and generated sales of $1.5 billion in 2000, according to the company. The malls are 93% leased.
Dickey said it was “premature” to speculate on a name change for the 13-year-old Santa Ana mall, but said Westfield’s tradition is to bring its brand, known as “Westfield Shoppingtowns,” malls it acquires. All of its other California malls bear the “Shoppingtown” designation in some form.
“A name change alone won’t make a difference,” Cherbak said. “It’s the whole package that matters.”
New ownership often means renovations or a new mix of tenants are on the horizon, Cherbak said.
“In any retail operation, change is good,” he said, if it brings unique elements and regenerates customer interest.
“There’s significant competition in the area. If you’re not unique, you’re just another shopping center,” Cherbak said.
One OC retail broker said Westfield wasn’t much different from other major shopping mall operators and that consumers might not see much difference at MainPlace.
The mall faces stiff competition from newer shopping centers such as The Block at Orange. That competition drove Kansas City-based AMC Entertainment Inc. to close its six-screen cinema at MainPlace in 2000. The theaters later were reopened under private ownership.
MainPlace focuses heavily on drawing tourists and got a boost in recent months after a California Welcome Center opened on site in November. The center has brought a lot of foot traffic to the mall since its opening, according to the mall’s director, Rachel Harris.
Westfield began the Shoppingtown brand in the 1960s in Australia. Prior to the deal closing, Westfield’s U.S. operations include 36 regional and super regional shopping malls, three power malls and 12 separate department store properties.
The properties encompass 37.8 million square feet of retail space and more than 5,000 stores.
