Australia’s Westfield Group (ASX:WDC) (OTCMKTS:WEFIF) said Monday that it has agreed to sell seven of its shopping malls in the United States to Starwood Capital Group for $1.6 billion. However, the Australian company will retain 10 percent equity interest in each of those malls.  Westfield Group (ASX:WDC) (OTCMKTS:WEFIF) is the world’s largest operator of shopping centers. It operates and has interests in 99 shopping centers across the globe, with more than 22,000 retail outlets.

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Westfield offloading less profitable assets

The malls are located in California, Indiana, Ohio and Washington state, reports Ross Kelly of The Wall Street Journal. Westfield Group (ASX:WDC) (OTCMKTS:WEFIF)’s exit comes at a time when the U.S. economy recovery has pushed demand for retail properties. The company sold malls on their book value as of June 30.

Westfield Group (ASX:WDC) (OTCMKTS:WEFIF) is offloading some of its less profitable assets to re-deploy funds to newer and more promising developments. Most of the company’s low productivity properties are in the North-East and Midwest. Last year, Westfield Group (ASX:WDC) (OTCMKTS:WEFIF) also sold seven U.S. malls to Starwood Capital Group in a $1 billion deal. The company has also sold 49.9 percent stakes in six malls in Florida to O’Connor Capital Partners for $700 million.

Westfield investing in the World Trade Center

Westfield Group (ASX:WDC) (OTCMKTS:WEFIF) has invested $612.5 million in the retail part of New York’s World Trade Center, according to Nichola Saminather of Bloomberg. It is also developing and expanding shopping malls in Los Angeles, Montgomery and New Jersey. The outlook of the U.S. retail property sector has started improving recently after years of sluggish growth. Interest rates remain ultra-low, prompting buyers to invest in the real estate.

Earlier this year, Blackstone Group LP (NYSE:BX) sold the majority of its stake in 30 U.S. shopping centers for $1.5 billion to DDR Corp (NYSE:DDR). Westfield Group (ASX:WDC) (OTCMKTS:WEFIF)’s billionaire founder and CEO Peter Lowy said that he expects to close the deal by the end of this year. After this stake sale, Westfield Group (ASX:WDC) (OTCMKTS:WEFIF) will still be operating 40 shopping malls in the United States.

As of June 30, Westfield Group (ASX:WDC) (OTCMKTS:WEFIF) has net debt of A$13.1 billion ($12.2 billion). Australian shares of Westfield Group (ASX:WDC) (OTCMKTS:WEFIF) jumped 1.11 percent to A$10.96 on Monday.