Brookfield Property Partners has entered into a definitive agreement to acquire the share of real estate company GGP that it doesn’t already own for approximately $15.2 billion. GGP rejected a $14.8 billion buyout offer in November 2017, but negotiations were expected to continue due to pressure from the acquisition of Westfield Corporation by Unibail-Rodamco, Europe’s largest property firm, in December 2017.
Brookfield wants to extract value from the GGP assets, which include the Grand Canal Shoppes in Las Vegas and Tysons Galleria in McLean, Va. This strategy would be similar to how Brookfield handled the acquisition of Rouse Properties in 2016, according to Bloomberg. Much of the land owned by Rouse was repurposed as residential, commercial and office space.
“This is a tough environment for retail real estate companies today,” said Brian Kingston, CEO at Brookfield in an interview with Bloomberg. “But there are a lot of things on this land that you can do to enhance the value that may not necessarily be retail. We have expertise in multifamily, office and hotels. As soon as we brought Rouse in, we were able to unleash all of those.” GGP malls in urban areas are particularly valuable, added Kingston.
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