comscore Mall chief awaits competitor's move | Honolulu Star-Advertiser

Mall chief awaits competitor’s move


General Growth Properties Inc. Chief Executive Officer Sandeep Mathrani said he’s watching rival mall owner Westfield Group’s planned sale of 17 U.S. properties before choosing a strategy for trimming his own company’s holdings.

"We want to evaluate what they do to decide in which direction we head," Mathrani said in an interview Thursday at a National Association of Real Estate Investment Trusts conference in New York. "We do want to pare down the number of assets we have."

Mathrani said that if Sydney-based Westfield sells properties at a capitalization rate of 7 percent, "I’m going to sell," and if it’s 9 percent, "I’ll re-evaluate." Capitalization rates fall as prices rise. The investment-yield measure is calculated by dividing net operating income by purchase price.

At General Growth, the second-largest U.S. mall owner, Mathrani has planned to sell $2 billion of office buildings, strip malls and lower-quality regional malls, and use a portion of the proceeds to pay down debt.

The company, which owns Ala Moana Center and Ward Centers, made $300 million of property sales since coming out of bankruptcy in November, and had an additional $387 million under contract for sale, Mathrani said on an April 27 conference call. General Growth planned $350 million in additional sales for the rest of the year, he said.

The mall owner is considering spinning off 35 properties into a real estate investment trust, Reuters reported June 3, citing people familiar with the plan.

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