Westfield Group (WDC) will be selling a 50 per cent share in the retail component of its Westfield Stratford City for $1,425 million.

The share, which is worth approximately $490 million in profit, has been sold to a new joint venture comprising APG of The Netherlands and Canada Pension Plan Investment Board (CPPIB).

Westfield Group managing director Steven Lowy said the company will significantly improve its return on invested capital from the development.

"Today's announcement continues our strategy of creating value through the introduction of joint venture partners into our assets globally, at the appropriate time. Importantly, this transaction delivers, a year ahead of opening, the value and profit we have created through the development of Stratford City,” he said.

According to Lowy, the Group will remain a long term investor, property manager and developer of the shopping centre.
It will also continue to retain full ownership of the adjacent non-retail development sites where it has invested approximately $298 million and that is expected to create additional value over time. 

Westfield Stratford City has been scheduled for completion in time for the 2012 London Olympics and Paralympic Games as it will be the ‘gateway’ to the Olympic park.  Approximately 70 per cent of the anticipated 10 million spectators will pass through Westfield Stratford City en route to the Park during the Games.

"We are pleased to be able to expand our long term partnership with both CPPIB and APG, through the joint venturing of Stratford City," Lowy said.

Westfield said it expects to reinvest retained earnings into its future capital activities including redevelopment opportunities, which have expected unlevered long term annual investment returns of between 12 to 15 per cent.

The transaction is expected to close in late 2011 and is subject to the project completing and opening.