UPDATE: Westfield Forms Florida Malls JV, to Raise $700 Million

-- Westfield sells 49.9% stake in six Florida malls to O'Connor Capital Partners

-- Westfield to receive about $700 million from sale

-- Shares rise on announcement

(Adds investor comment in third and sixth paragraphs, share price reaction in seventh paragraph, background in eighth and ninth paragraphs.)

By Gavin Lower

MELBOURNE--Westfield Group (WDC.AU), one of the world's largest shopping center developers, will receive about $700 million after selling stakes in six malls in Florida as part of its strategy to take on joint venture partners and sell noncore assets.

The Australia-based company said in a statement Monday U.S. real estate firm O'Connor Capital Partners would take a 49.9% stake in the portfolio of six regional Florida malls, valued at $1.28 billion.

Westfield shares in Sydney rose following the announcement and at 0332 GMT were up 2%, while the benchmark S&P/ASX 200 was up 0.7%.

Westfield has been selling stakes in its more-established assets to raise capital for its expansion into fast-growing markets such as Brazil, and investments in larger developments such as the retail wing of the World Trade Center under construction in New York.

Peter Borkovec, an analyst at White Funds Management, which holds Westfield shares, said he hoped the company would deploy proceeds from the sale towards high-yielding developments in other markets such as South America and Europe.

Earlier this year Westfield's Co-Chief Executive Peter Lowy said the company's capital management strategy included reinvesting capital into developments offering high returns and buying back securities.

"I feel comfortable management is sticking to their direction," Mr. Borkovec said.

Last year, Westfield sold off eight shopping centers in the U.S. for $1.15 billion, with the proceeds used to pay down debt and applied to developments that would generate higher returns. It also entered joint ventures over 12 assets in the U.S. with Canada Pension Plan Investment Board and sold interests in shopping centers in the U.K.

It is also planning a development in Milan, Italy, and is exploring opportunities in Brazil after buying a 50% stake in Almeida Junior Shopping Centers S.A.

The company said in Monday's statement it would remain as property, leasing and development manager of the Florida malls, with the deal subject to financing but expected to be finalized in the second quarter.

"This agreement carries on the group's strategy of introducing joint venture partners into our assets globally as well as disposing of noncore assets," Westfield's Mr. Lowy said in the statement.

The company said while the sale would dilute its funds from operations by about 1 Australian cent per security in 2013, the impact was expected to be offset as it redeployed capital, including towards its previously announced buyback of securities.

Write to Gavin Lower at [e-mail]

Subscribe to WSJ: http://online.wsj.com?mod=djnwires