SAN JOSE — A European real estate company is planning to keep a large chunk of its portfolio of shopping centers in the United States — possibly including two big shopping malls in San Jose — due to their top-notch performance.
Westfield Valley Fair and Westfield Oakridge might be retained by France-based Unibail-Rodamco-Westfield due to a shift in the company’s strategy for its property holdings in the U.S.
The new line of thinking was disclosed during a recent conference call held to discuss the Unibail-Rodamco-Westfield (URW) financial and operating results for 2024. URW CEO Jean-Marie Tritant sketched out the shift in strategy during his presentation.
Tritant first described URW’s quest to sell off or otherwise dispose of several shopping centers in the U.S. in a push to slash its debts and loan payments.
“Over the past four years, we have reshaped our portfolio through disposals, made significant deleveraging progress, enhanced our operations and transformed the group’s risk profile,” Tritant said.
The CEO then noted that the effort was complete. Its success has enabled the company to shift its approach to its holdings.
“Having achieved this transformation, we have taken the strategic decision to retain our high-performing U.S. flagship assets, which will deliver further growth and value creation,” Tritant said.
The company didn’t precisely specify or define what is a “high-performing U.S. flagship” shopping mall.
In years past, however, URW executives have referred to malls such as Westfield Valley Fair on Stevens Creek Boulevard in western San Jose as one of its flagship shopping, retail and restaurant centers in the U.S.
URW executives in February 2024 said active negotiations were underway to sell Westfield Oakridge on Blossom Hill Road in south San Jose. In July 2024, however, URW revealed that the timeline had slipped for the possible sale of the shopping center.
“On July 11, 2024, URW extended the exclusivity period for the sale of Westfield Oakridge,” URW stated in the earnings presentation. “URW had received a nonrefundable deposit of $30 million.”
In its most recent conference call, as well as supporting documents for 2024 results, URW didn’t provide an update on the status or potential timeline for a possible sale of Westfield Oakridge.
URW did note that in the U.S. market, “the tenant mix continued to evolve in line with market trends with the opening of exciting retailers” such as Uniqlo at Westfield Oakridge, the company stated in its report for 2024.
Westfield Valley Fair is one of 11 “flagship” shopping centers, including five in California, that URW owns in the United States. Valley Fair is also the only URW flagship in the Bay Area.
Westfield Oakridge is listed as one of four “regional” shopping centers in the U.S., including two in California.
URW also noted that it had previously unloaded — through a foreclosure — a dying shopping center in San Francisco on Market Street that has lost the vast majority of its tenants.
The vacancy levels at the company’s flagship malls in the U.S. were encouraging, URW CFO Fabrice Mouchel stated during the conference call.
“U.S. flagship vacancy stood at 6.2%, down from 7.3% in 2023 and below pre-COVID levels of 7.7% and its 2020 peak of 12.5%, showing the recovery in the U.S. and the appeal of our prime assets for retailers,” Mouchel told analysts.
Company officials did warn it’s possible more U.S. shopping centers could still wind up on the sales block, as the company’s strategy evolves.
“Our deleveraging is not yet complete,” Tritant said.
The company might again ponder shopping center sales in the U.S. starting in 2026.
“We’ll see what is the right level of additional disposals that we need to do after 2025,” Tritant said. “We’ll continue to make sure we have fully streamlined our portfolio of assets and activities.”
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