Westfield moves into US residential sector with Greystar
Global shopping centre operator Westfield Corporation has teamed up with Greystar to develop and manage a 300-apartment tower in San Diego, California.
The project is Westfield’s first foray into the residential sector, and it will be a prelude to other Westfield residential developments in the US and UK.
The Australian-listed Westfield said the San Diego asset will form part of the UTC shopping mall complex. The company has been undertaking a US$600m (€497m) redevelopment of the shopping mall, due to finish this year.
Construction began this week on the apartment tower, which is expected to be completed by 2019.
Westfield said the start of construction follows a five-year planning effort by Westfield and Greystar, the apartment developer, which will manage the residential complex when it opens.
Greystar, the world’s largest rental landlord and operator, has a San Diego regional office and manages existing apartment blocks in the US city.
The building will offer a range of amenities, including a junior Olympic pool, fitness centre, club room, library and concierge service.
Westfield and Greystar did not disclose the development cost of the residential tower, but it is reported to be around US$200m.
Westfield said the project is the first of its type for the company in the US.
The shopping centre owner has established a new division, Westfield Residential, to work on a pipeline of some 8,000 apartments globally.
Westfield, which runs 35 shopping malls in the US and Europe valued at AUD32bn, has identified several sites that offer potential for residential development.
However, it is unclear whether Westfield’s relationship with Greystar will extend to other US cities or to the UK, where Greystar is rapidly building its own residential rental portfolio.
Westfield Residential says on its website that it expects to commence a 1,200 apartment project at Westfield Stratford City in the UK in 2018.
It also has approval to build 1,500 new homes as part of its £1bn expansion plan for Westfield London in White City.
In recent years, Westfield said, it has been analysing opportunities to provide residential dwellings on the land around its shopping centres.
It sees residential development as something that can increase the value of its retail portfolio and generate additional customer visits and retail sales.
During 2016, Westfield progressed planning, analysis and resourcing for residential opportunities, and is currently in the process of gaining approvals from local authorities for a number of sites.