Westfield America Trust increases distribution by 8.9% per unit

07 August 2002

Countries: United States

Westfield America Trust today announced a distribution of $222.8 million for the half year to 30 June 2002, which represents 7.35 cents per unit, an increase of 8.9% per unit over the previous corresponding period. This distribution is in line with that foreshadowed in January of this year.

The distribution includes a one-time capital payment of $59.7 million (equivalent to 1.97 cents per unit), which comprises an amount of $47.7 million to offset the dilutionary effect of receiving the proceeds of various capital raisings prior to the settlement of the Rodamco North America (RNA) acquisition, and an amount of $12.0 million in respect of the write off of the Trust’s investment in MerchantWired LLC (MW) (referred to below).

The tax-advantaged component of the cash distribution of 7.35 cents per unit is approximately 60% inclusive of the capital payment.

The Trust’s profit after tax, which includes the MW write off, for the half year ended 30 June 2002 was $163.1 million, which represents 5.38 cents per unit. The underlying US dollar earnings were converted into Australian dollars at an average exchange rate of US$0.5756, being the rate achieved after the impact of currency hedging.

The profit increase reflects strong operational results, the impact of various capital transactions and approximately two months contribution from the RNA and Jacobs properties.




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Major transactions

Westfield America Trust acquired 23 shopping centres from RNA and the Richard E. Jacobs Group with a total value of approximately $6 billion. These acquisitions, which have already been successfully integrated into the Westfield America portfolio, have increased the number of the Trust’s shopping centres to 61, with more than 5.8 million square metres of retail space and provided strong exposure across the West Coast, Mid West and East Coast regions of the United States.

Other acquisitions

During the half year, the Trust also acquired the remaining 50% interests in Franklin Park Mall in Ohio, for US$67million and Century City Shopping Centre in Los Angeles, for US$165 million after acquiring the initial 50% interests as part of the RNA transaction

Financial information

As part of the Trust’s ongoing three-yearly revaluation cycle, 19 shopping centres were revalued during the period resulting in a revaluation surplus of $91.3 million. At 30 June 2002, total assets of the Trust exceeded $16.0 billion and net borrowings were $7.9 billion.

MerchantWired LLC (MW)

The Trust participated in an industry-wide venture with Simon Property Group, The Rouse Company, Taubman Centers Inc. and The Macerich Company (all major US listed regional mall REIT’s). The venture was established to develop and operate broadband communication infrastructure within US regional malls. The partners recently decided to wind up the venture.

Capital raisings

During the period the Trust raised $2.68 billion. This included $2.4 billion for the RNA transaction from a number of sources: an underwritten institutional placement; ABP (the leading Dutch pension fund); Westfield Holdings Limited; existing unitholders and the retail market; and $275 million through the Distribution Reinvestment Plan and conversion of existing Partly Paid Units.

The market capitalisation of the Trust at 30 June 2002 was $6.4 billion making it the second-largest Australian listed property trust on the ASX with an S&P – ASX Property Index weighting of 12.2%.

Operational results

Retail sales in Westfield’s US portfolio, excluding the Jacobs and RNA portfolios, totalled US$3.8 billion during the half year to 30 June 2002, consistent with the same period last year. Comparable specialty store sales per square foot for this portfolio decreased 0.7% against those recorded in the six months to June 2001.

During the six months, specialty shop leasing has been strong. In the pre-acquisition portfolio of 39 Shoppingtowns leases totalling 1.1 million square feet were signed including 0.9 million square feet of mall shops at rents averaging $47.40 per square foot, representing a 37.1% increase over expiring rents.

Mall shops in the Trust’s enlarged portfolio of 61 centres at 30 June were 93% leased. The pre-existing portfolio of 39 centres was 94% leased, the same as reported in June 2001. In the two months since acquisition, mall shops leased in the Jacobs portfolio increased from 88% to 89% and, in the RNA portfolio, from 91% to 92%.

Investment projects

During the period, the Trust’s investment projects were progressing well with all projects on schedule.

The final stage of the US$175 million redevelopment of Westfield Shoppingtown Valley Fair in San Jose, California was opened in March 2002. The centre opened 100% leased.

The US$57 million redevelopment of Westfield Shoppingtown South County in St. Louis, Missouri, will be completed this month.

The US$237 million redevelopment of Westfield Shoppingtown West County, also in St. Louis, will open in September 2002 two months prior to the budgeted opening date.

The Trust’s US$134 million redevelopment of Westfield Shoppingtown Oakridge, in San Jose, California, commenced in June and is scheduled to be completed in the first half of 2004.

World Trade Center

The insurance claims and future planning issues relating to the World Trade Center are progressing and will take some time to resolve. The Trust remains confident that the property insurance policies are adequate to protect its investment and to reimburse it for expected business interruption losses due to the terrorist attacks.


“In addition to the major acquisitions and the capital raisings undertaken in the period under review, we have continued to drive our operations with an intensive focus on leasing, developments and other profit generating activities,” said Mr Peter Lowy.

Barring unforeseen circumstances, Directors believe the Trust is on track to achieve the previously forecast distribution of 15.3 cents per unit for the full year to 31 December 2002.

*All amounts in this media release are in Australian dollars, unless otherwise stated.