Brookfield Property Partners Invests $1.4 Billion to Increase Interest in General Growth Properties to 32%

  • Brookfield Property Partners L.P. 
  • BPY to acquire  shares and warrants of GGP for $1.4 billion
  • BPY will own 32% of the fully-diluted outstanding shares of GGP
  • Transaction to be funded through the issuance of $1.4 billion of equity to institutional investors and Brookfield Asset Management
  • BPY continues as part of a broader consortium with institutional investors owning collectively 40% of GGP on a fully-diluted basis
US$ unless otherwise specified
Brookfield Property Partners L.P. (Brookfield Property Partners) announced that it has agreed to acquire additional shares and warrants of General Growth Properties, Inc. (GGP) for total consideration of $1.4 billion.
As a result of the acquisition, Brookfield Property Partners will increase its fully-diluted ownership interest in GGP to 32%, assuming the exercise of all of the outstanding warrants or approximately 28% on an undiluted basis. Brookfield Property Partners will continue to hold its interest in a consortium alongside institutional investors who, collectively with Brookfield Property Partners, will own approximately 40% of GGP on a fully-diluted basis.
"This transaction provides Brookfield Property Partners with the opportunity to increase its exposure to one of the highest quality shopping center portfolios in the world at an attractive valuation," said Ric Clark, Chief Executive Officer of Brookfield Property Group. "As a result of this and GGP's strong organic growth prospects, we believe that the investment will earn a return that exceeds our target range of 12% to 15%. We are pleased that the transaction successfully transitions our GGP investment partnership to a new phase for the benefit of Brookfield Property Partners and its institutional partners."
The acquisition will be funded through the issuance of $435 million of units of Brookfield Property Partners to Investment Corporation of Dubai and other institutional investors and $995 million of redeemable-exchangeable units of a subsidiary of Brookfield Property Partners to Brookfield Asset Management Inc.
For further details regarding the transaction, see Appendix "A".
Benefits to Brookfield Property Partners
Increased exposure to one of the highest quality shopping center portfolios in the world
The additional investment in GGP increases Brookfield Property Partners' exposure to a premier portfolio of 123 best in class retail malls in the United States. As a result of high quality, credit-worthy tenants in attractive markets, GGP's malls produce over $560 of sales per square foot and generate stable long-term cash flows. 
Enhanced organic growth profile
Over the past five years, GGP has increased same-store sales by an average of 5% per year by improving tenant mix, rolling over leases at market prices and increasing the occupancy of its malls. Additionally, GGP has a redevelopment pipeline of approximately $2 billion, which is expected to earn 9% - 11% unleveraged returns on investment.
Increased public float
Following completion of the transaction, the public float of Brookfield Property Partners will increase by 28% ($435 million). Brookfield Property Partners previously announced its intention to make an offer to acquire any or all of the common shares of Brookfield Office Properties Inc. (NYSE: BPO) (TSX: BPO) that it does not already own. If fully successful, Brookfield Property Partners' public float could increase to over $5 billion.


on November 1, 2013