Westfield Sells Half Stratford Retail for $1.4B

LONDON-A joint venture of two pension funds, Australia-based APG and the Canada Pension Plan Investment Board, has agreed to pay $1.4 billion for a 50% interest in the retail portion of Stratford City. Westfield is investing $2.3 billion on the large mixed-use project, of which the retail portion will encompass 1.9 million square feet.

The value of the property is raised by being the gateway to London Olympic Park, which will host the Olympic and Paralympic Games in 2012. About seven million people spectators are expected to pass through the Stratford City project during the Games, according to a Westfield statement.

Officials with APG and Westfield did not return calls for comment. A Canada Board spokeswoman tells GlobeSt.com that this investment will stand the test of time. “Sure, we’re in a recession, but we’re long-term investors, we tend to invest for 30-to-40 years. We know that this project has a lot going for it, such as its location, the catchment area, near transportation and a first-in-class partner with Westfield, which has created some of the best retail centers in the world. This is a very solid investment,” she says. Graeme Eadie, SVP for real estate investments at the Canadian fund, said in a statement that the Stratford City retail “will deliver stable cash flows.”

The retail portion is already 75% leased or committed, and includes anchors such as John Lewis, Marks & Spencer, Waitrose and an all-digital Vue theater. When finished in Q3 2011, the retail portion of the project will include more than 300 shops and 50 restaurants, according to Westfield.

The entire Stratford City project also will include 1.1 million square feet of office, an apartment complex and two hotels, including a 267-room Premier Inn and another 350-room hotel that has not been branded yet. The JV did not invest in the non-retail parts of the project.