Australian shopping centre giant The Westfield Group has made a strong move into the Brazilian market through the strategic acquisition of a 50% interest in Almeida Junior Shopping Centers, with Chairman Frank Lowy tellingly pointing out that it is their first new market entry since they entered the United Kingdom in 2000. Lowy added that whilst the climate in the world financial markets is volatile at present, this transaction is in the Group's long term investment and funding plan, and one they have been investigating for an extensive period of time.
Led by its founder and CEO, Jaimes Almeida Junior, Almeida Junior Shopping has been operating shopping centres in Brazil since 1993, handling all aspects of shopping centre design, development, construction, leasing, marketing, management and ownership along similar lines to Westfield. Based in Sao Paulo, Almeida employs approximately 1,000 people and sports a portfolio of approximately 157,000sqm of retail space with almost 900 stores.
Westfield will invest R$740 million (AU$440 million) and become a 50% owner and active partner in the company, to be renamed Westfield Almeida Junior Shopping Centers S.A. The new business will own and operate five shopping centres in southern Brazil, including two currently under development.
The Co-CEO of Westfield Group, Steven Lowy, said the underlying characteristics of the Brazilian market combined with a strong and diversified local retailer base and growing consumer spending makes Brazil a strategic long term growth opportunity for the Group. He added that the partnership is an exciting launching pad into the region and that they plan to significantly expand the business in Brazil through development and acquisition.
Upon announcing the move, Westfield provided a range of key figures on the Brazilian market, including:
- currently the seventh largest economy in the world with a GDP of approximately US$2.1 trillion and a population of approximately 190 million people
- high economic growth over recent years as well as a substantial increase in its middle class population - over 110 million people in Brazil are now considered to be middle class or above
- retail sales have grown strongly since 2000 with shopping centres in Brazil representing only 18% of the country's total retail sales compared to 52% in the United States and 41% in Australia
- shopping centre space per capita of population is relatively low in Brazil, at 0.05 square metres (sqm) per person, compared to 1.37sqm in the US, 0.54sqm in Australia and 0.21sqm in the United Kingdom
- ownership of shopping centres is also highly fragmented