The Real Deal New York

Brookfield mulling GGP takeover: report

Toronto-based asset management giant lodged similar bid for Rouse this month

January 29, 2016 02:16PM

Brookfield GGP

Brookfield Place in Battery Park City (credit: Pelli Clarke Pelli) (inset: Sandeep Mathrani)

Fresh off announcing a takeover bid for mall landlord Rouse Properties, Brookfield Asset Management is reportedly looking into an entity-level acquisition of retail giant General Growth Properties.

While deliberations are reportedly not at an advanced stage and there is no certainty that Brookfield will lodge an offer for GGP, the deal would be indicative of how property investors value publicly-listed real estate assets – given how many real estate investment trusts have traded at less than the net value of their holdings.

Toronto-based Brookfield already owns around 34 percent of GGP, according to Reuters, and has approached several potential investment partners, including sovereign wealth funds, to discuss potentially taking GGP private.

The link to sovereign wealth funds is particularly interesting, as the Qatar Investment Authority recently acquired a 44 percent stake in Brookfield’s $8.6 billion Manhattan West mixed-used development on the Far West Side.

Earlier this month, Brookfield lodged a bid to acquire the remaining shares in Bryant Park-based Rouse Properties in a deal that would value the mall REIT at around $1 billion.

As with GGP, Brookfield already owns about a third of Rouse’s outstanding stock, and the two retail landlords have close ties – Rouse was spun off from GGP in 2012.

Chicago-based GGP, which owns 131 properties across the country, saw its shares jump as much as 6.5 percent in wake of the news of a potential Brookfield takeover.

The Sandeep Mathrani-led REIT’s stock has traded down more than 13 percent in the last 12 months, while Barclays downgraded GGP this week citing “formidable headwinds in the mall space.” [Reuters] — Rey Mashayekhi