Taubman to Sell 50 Percent of its Interests in its Three Asia Shopping Centers to Blackstone
February 14 2019 - 7:30AM
Business Wire
Taubman Centers, Inc. (NYSE: TCO) has announced agreements to
sell 50 percent of Taubman Asia’s interests in three Asia-based
shopping centers to funds managed by The Blackstone Group L.P.
(Blackstone). Blackstone will be making this investment through its
Asia Core+ real estate investment unit. The investment unit targets
substantially stabilized office, logistics, residential and retail
assets in high quality Asian geographies and gateway cities. The
interests are valued at $480 million. The transactions are subject
to customary closing conditions and are expected to close
throughout 2019.
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Starfield Hanam shopping center (Hanam,
Gyeonggi, South Korea) (Photo: Business Wire)
Taubman will remain the partner responsible for the joint
management of the three shopping centers and retain the following
ownership interests:
- 17.15 percent in Starfield Hanam
(Hanam, South Korea)
- 25 percent in CityOn.Xi’an (Xi’an,
China)
- 24.5 percent in CityOn.Zhengzhou
(Zhengzhou, China)
The recently opened assets are the dominant shopping centers in
their high growth markets and benefit from favorable supply
dynamics. The Starfield Hanam shopping center is already one of the
most productive retail assets in the world, and the two assets in
China comprise some of the highest quality and most productive
retail offerings in their respective markets. In addition, sales
growth continues to outperform the market with sales up by double
digits in 2018 across all three shopping centers.
“We are delighted to announce this agreement with Blackstone.
It’s consistent with Taubman’s history of recycling capital for
growth, once value is created from development projects,” said
Robert S. Taubman, chairman, president and chief executive officer.
“We think Blackstone will be a valuable strategic partner that can
help us grow our platform in Asia.”
“We’re excited to partner with a best-in-class developer and
operator in Taubman and add these high-quality assets to Blackstone
Property Partners’ recently launched Core Plus real estate
investment unit in Asia,” said Chris Heady, Chairman of Asia
Pacific and Head of Real Estate Asia at Blackstone. “In partnership
with Wangfujing in China and Shinsegae in South Korea, Taubman has
built an impressive platform of three world class and dominant
shopping centers and we look forward to working closely together in
the future.”
Net cash proceeds to Taubman are expected to be about $315
million, after transaction costs and the allocation to Blackstone
of its share of third-party debt.
“This transaction not only confirms the success of our platform
in Asia, it increases our liquidity and strengthens our balance
sheet in an earnings-accretive manner,” said Simon J. Leopold,
executive vice president, chief financial officer at Taubman.
J.P.Morgan acted as exclusive financial advisor to Taubman on
the transaction.
Investor Presentation: Taubman Asia Blackstone Transactions
About Taubman
Taubman Centers is an S&P MidCap 400 Real Estate Investment
Trust engaged in the ownership, management and/or leasing of 26
regional, super-regional and outlet shopping centers in the U.S.
and Asia and one under development. Taubman’s U.S.-owned properties
are the most productive in the publicly held U.S. regional mall
industry. Founded in 1950, Taubman is headquartered in Bloomfield
Hills, Mich. Taubman Asia, founded in 2005, is headquartered in
Hong Kong. www.taubman.com.
For ease of use, references in this press release to “Taubman
Centers,” “company,” “Taubman” or an operating platform mean
Taubman Centers, Inc. and/or one or more of a number of separate,
affiliated entities. Business is actually conducted by an
affiliated entity rather than Taubman Centers, Inc. itself or the
named operating platform.
This press release may contain forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. These statements reflect management's current views with
respect to future events and financial performance. Forward-looking
statements can be identified by words such as “will”, “may”,
“could”, “expect”, “anticipate”, “believes”, “intends”, “should”,
“plans”, “estimates”, “approximate”, “guidance” and similar
expressions in this press release that predict or indicate future
events and trends and that do not report historical matters. The
forward-looking statements included in this release are made as of
the date hereof. Except as required by law, the company assumes no
obligation to update these forward-looking statements, even if new
information becomes available in the future. Actual results may
differ materially from those expected because of various risks and
uncertainties, including that the conditions to one or more
transaction closings may not be satisfied, the potential impact on
the company due to the announcement of the disposition of ownership
interests, the occurrence of any event, change or other
circumstances that could give rise to the termination of the
transactions, general economic conditions, and other factors. Such
factors include, but are not limited to: changes in market rental
rates; unscheduled closings or bankruptcies of tenants;
relationships with anchor tenants; trends in the retail industry;
challenges with department stores; changes in consumer shopping
behavior; the liquidity of real estate investments; the company’s
ability to comply with debt covenants; the availability and terms
of financings; changes in market rates of interest and foreign
exchange rates for foreign currencies; changes in value of
investments in foreign entities; the ability to hedge interest rate
and currency risk; risks related to acquiring, developing,
expanding, leasing and managing properties; competitors gaining
economies of scale through M&A and consolidation activity;
changes in value of investments in foreign entities; risks related
to joint venture properties; insurance costs and coverage; security
breaches that could impact the company’s information technology,
infrastructure or personal data; costs associated with response to
technology breaches; the loss of key management personnel;
shareholder activism costs and related diversion of management
time; terrorist activities; maintaining the company’s status as a
real estate investment trust; changes in the laws of states,
localities, and foreign jurisdictions that may increase taxes on
the company’s operations; and changes in global, national, regional
and/or local economic and geopolitical climates. You should review
the company's filings with the Securities and Exchange Commission,
including “Risk Factors” in its most recent Annual Report on Form
10-K and subsequent quarterly reports, for a discussion of such
risks and uncertainties.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20190214005438/en/
Erik Wright, Taubman, Manager, Investor
Relations248-258-7390ewright@taubman.comMaria Mainville, Taubman,
Director, Strategic
Communications248-258-7469mmainville@taubman.com
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