Westfield America, Inc. annual shareholders meeting chairman’s address


Countries: United States

We had a remarkable year and we are proud of our accomplishments. We have been very successful since the Company’s initial public offering (IPO) on May 21, 1997, and we look forward to accelerated growth and strong earnings in the years ahead.

Westfield America’s growth strategy is guided by a business philosophy built upon a solid foundation of retail real estate experience and expertise which has enabled us to capitalize upon trends and opportunities in our dynamic industry:

  • Our objective is to create shareholder wealth through effective operations, development and acquisition of carefully selected shopping centers.
  • We seek to provide superior management via an intense focus on operational excellence, management talent, and economies of scale by strategic clustering of malls.
  • We redevelop and expand key properties within our portfolio, to maximize sales productivity and increase market penetration, resulting in higher rents;
  • We pursue selective acquisitions that offer market synergies with our existing property base and/or redevelopment and improvement opportunities;


The Westfield America portfolio offers exciting and rewarding opportunities for our retailers, consumers and shareholders. And I am pleased to report that revenues, earnings, and strategic acquisitions since our IPO confirm our market position.

  • As of yesterday, total return to shareholders since the IPO has been 26% comprised of an increase in the stock price and dividends.
  • For 1997, FFO was $111.3 million, representing $1.53 per share, on revenues of $253.7 million.
  • Total retail sales in our malls for the year were $3.8 billion; with Specialty Store sales increasing 4.4 percent on a comparable square foot basis over the preceding year.
  • Average mall base rents increased 2.9 percent to $28.11 per square foot.
  • It was a record leasing year for us with 1.2 million square feet being leased in 1997 and increased mall store space leased from 92% to 93% over last year. This is at the top level achieved in our industry.
  • In 1997, we invested $350 million in four major acquisitions. At Annapolis Mall in Annapolis, Maryland, we purchased the 70% interest not previously owned. We also purchased 68% of Wheaton Plaza in Wheaton, Maryland, and the remaining 50% (that we did not own) in Meriden Square in Connecticut, and 100% of Northwest Plaza in St. Louis. After year end, in January, 1998, we purchased 100% of Crestwood Plaza in St. Louis, Missouri, bringing our total new investment since the IPO to $456 million. These malls added more than 3.9 million square feet of new retail space to the Westfield America portfolio.


Increasing productivity and profitability through redevelopment and repositioning is Westfield America’s specialty. In 1997, we announced plans to invest $400 to $500 million over the next five years to redevelop key properties in our current portfolio.

Redevelopments under construction include Annapolis Mall, in Annapolis, Maryland, South Shore Mall, on Long Island, New York, and Mission Valley West, in San Diego, California. By the end of the year in Connecticut, Meriden Square’s expansion will be underway and the $200 million redevelopment and expansion of West County Center, St. Louis, Missouri, is expected to begin.

We are known within the industry for our internal growth through redevelopment, expansion and our intense leasing focus on the portfolio.

Westfield America also pursues growth through strategic acquisitions employing the same levels of intensity and discipline.

Recently, the company announced a major acquisition, together with The Rouse Company. Together we signed a definitive agreement to acquire The Hahn Portfolio of shopping centers from TrizecHahn for a approximately $2.55 billion.

Our share is $1.44 billion and we are purchasing 13 of the 20 malls in the Portfolio, all of them located on the West Coast.

This acquisition substantially advances our strategy of clustering regional shopping centers in major metropolitan markets to obtain market penetration. There are 4 malls in San Diego, 3 in Los Angeles and 5 in Northern California. After this acquisition, Westfield America will have a total of 37 malls with 34.2 million square feet of gross leaseable area. Twenty malls are located in California and of those malls 8 are in San Diego, 7 in Los Angeles County and 5 in Northern California – giving Westfield a substantial presence in these three markets. With the new malls, we will be the largest regional mall owner in California. We also have 5 malls clustered in St. Louis and 4 in Connecticut.

These new properties serve to strengthen our leadership position in strong and growing consumer markets, while providing considerable opportunity for further expansion and redevelopment.

The transaction will be completed in stages, beginning in September and finishing by the end of the year. The final price and the number of malls will be dependent upon the interests ultimately conveyed at closing.


Today we are announcing our financial results for the first quarter ended March 31, 1998.

  • Funds from operations (“FFO”) were $31.6 million, representing 39 cents per share, on revenues of $78.1 million.
  • Total Specialty Store sales for the quarter were $350.5 million on a comparable per square foot basis, representing an increase of 3.3% over the same period last year.
  • Leased store space was 93% at March 31, 1998, excluding our recent acquisitions of Northwest Plaza and Crestwood. At the time of purchase Northwest Plaza was 88% leased and Crestwood was 92% leased. Including these acquisitions, the leased store space was 92%.
  • Leases totaling 262,761 square feet were signed during the quarter at rents averaging $28.04 per square foot.
  • The debt to total market capitalization ratio was 47.4%.

A dividend was declared on to shareholders of record on March 31, 1998 of 35 and cents per common share . This equates to $1.42 per share on an annualized basis. The dividend is payable today.

A copy of our first quarter press release announcement is available after the meeting.


Westfield’s strong performance reflects our dual focus on internal and external growth and our commitment to shareholder value. We achieved solid retailer sales growth, and our redevelopment program served as a catalyst for significant increases in customer traffic.

Looking ahead, we are confident in our ability to continue to achieve internal growth by meeting operating goals and implementing redevelopment plans. With the current enhanced portfolio of 37 malls we believe there is now a basis for sustained profitable internal growth. We will also continue to pursue select strategic acquisitions. With a strong economy, excellent markets and highly productive regional malls, Westfield America is poised to achieve strong earnings and shareholder value growth in 1998 and beyond.

As we approach the new millennium, Westfield America advances with the strength, stability and earnings potential that strongly positions us for long term growth, productivity and value creation.