• By
Bloomberg News

For shopping mall giant Westfield Group the old adage that good things come in small packages may well ring true.

Or smaller packages at least.

Shares in the Australian company jumped more than 5% Wednesday after it announced it was breaking up its global mall empire through a spin-off of its Australian and New Zealand assets.

The split continues a strategy that Westfield started in 2010, when it separated a half-share of its local assets into another company: Westfield Retail Trust .

The decision to bundle the remaining 50% interest into Westfield Retail Trust has created two separate companies with different prospects for increasing profits. The theory is that fund managers can value them more accurately when they’ve been untangled and set free.

Westfield, which has a market value of more than 22.6 billion Australian dollars (US$20.4 billion) already rules the roost in the smaller markets of Australia and New Zealand. That means there’s not much opportunity to expand, so  returns from its assets there are more likely to be stable yet unexciting.

Big expansion opportunities exist in bigger markets like the U.S., or regions where Westfield doesn’t have much of a presence. Such regions include Latin America, Asia or mainland Europe.

Pursuing those opportunities carries significant risks. In April, Westfield suffered a major setback when it ended a less than two-year-old Brazilian joint venture with Almeida Junior Shopping Centers SA over differences in strategy. Westfield has kept some capital in the South American country and hopes to start building malls there on its own.

Still, analysts said the plan to break up Westfield’s assets makes sense, with WRT stock also rising as much as 5%. “This looks good for both companies,” said Moelis and Co’s Ben Rundle.

Westfield’s decision adds to a wave of demerger activity in Australia as companies take a view that the sum of their separate parts are worth more than the company as a whole.

Global logistics company Brambles Ltd., packaging company Amcor Ltd., and engineering company UGL Ltd. are among others that have either split or plan to split in two.