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Unibail-Rodamco-Westfield plans €3B post-merger asset sales to reduce debt

Unibail-Rodamco-Westfield SE will sell €3 billion of its noncore assets to decrease the debt it racked up to acquire Westfield Corp. for US$15.68 billion in June, The Wall Street Journal reported, citing the newly merged entity.

The properties to be sold include shopping centers and mature offices from the old €43 billion Unibail-Rodamco portfolio, said CEO Christophe Cuvillier.

After €3 billion worth of assets are divested, the global company will plan more sales in the fall from Westfield's portfolio of 35 malls, spanning 44 million square feet, which it added to its business following the takeover. The combined portfolio after the largest-ever retail real estate acquisition weighs in at €62 billion in value, with 102 shopping malls, 13 offices properties and 10 convention centers in Europe and the U.S.

Unibail said its current debt is equivalent to 37% of its portfolio value, but according to Green Street Advisors' Peter Papadakos, the figure stands at about 43% instead, the July 2 report added.

Papadakos, who is continental Europe head at the real estate investment trust research company, expects the Parisian mall giant will have to dispose of €9 billion of properties to achieve an optimal debt score, which will fall to a leverage ratio of roughly 40% after the planned €3 billion disposals.