Westfield Fountain Gate redevelopment completed
02 November 2001
Countries: AustraliaStage three of the redevelopment of Westfield Fountain Gate,which is owned by Westfield Trust, has been completed following theopening today of a Village 10-screen cinema complex, which housesthe largest in-door cinema screen in Australia.
Westfield Trust has invested more than $190 million in WestfieldFountain Gate over the past 20 months to expand the retail offerand to provide the people of Melbourne’s southeast suburbs with thelatest retail and entertainment experiences.
Westfield Fountain Gate now offers seven major stores, over 220specialty stores and parking for over 4,000 cars. Major storesinclude:
- Three supermarkets – Coles, Bi-Lo and Safeway;
- Three discount department stores – Kmart, Target and BigW;
- Ray’s Outdoors and Best & Less; and
- a Village 10-screen cinema complex and branded entertainmentand leisure precinct – The Street.
Importantly, a 2,000 square metre Dick Smith ElectronicsPowerHouse store and a 2,900 square metre Dimmeys discountdepartment store will also open prior to Christmas to replaceHarris Scarfe, who were due to open as part of the final stage ofthe redevelopment and were subsequently placed intoreceivership.
This will be the second Dick Smith Electronics PowerHouse storeto open in a Westfield centre in Melbourne; its other store willopen at Westfield Southland in late December.
Managing Director Dick Smith Electronics Mr Jeff Grover said:”We look forward to opening our new stores in Southland andFountain Gate Westfield centres. Whilst our smaller format storeshave populated Westfield centres for a long time, the much largerPowerHouse stores are new to Westfield. We are however, veryconfident, that this format will be successful in this type oflocation from our experience with several other PowerHouse storesin major centres.”
The redevelopment, which commenced in March 2000, has generatedmore than 1720 construction jobs as well as 940 new retailpositions.
As part of the redevelopment, Westfield has also completedconstruction of its signature entertainment and lifestyle precinctThe Street incorporating the Village 10-screen cinema complex withfive restaurants, a nightclub, the Fountain Gate Hotel andlifestyle retailers including Sanity, Jetty Surf and Angus &Robertson. The restaurants are due to open in time for Christmasand will officially complete the redevelopment project.
In a first for Westfield, The Street has been designed tointegrate with the civic precinct including the City of CaseyLibrary and Council Chambers and a new $17 million Aquatic andLeisure Centre.
Westfield Joint Chief Operating Officer Michael Gutman said theredevelopment of Westfield Fountain Gate had totally transformedthe centre into a true retail campus and the premier destinationfor convenience, food, fashion, homewares, lifestyle andentertainment in Melbourne southeast.
“Westfield Fountain Gate now offers a comprehensive range ofretail, entertainment and dining facilities,” Mr Gutman said.
“The City of Casey continues to be Victoria’s fastest growingmunicipality and the second fastest growth area in Australia. Withnearly 8,000 new residents moving into Westfield Fountain Gate’strade area annually, Westfield Fountain Gate has been positioned asthe retail heart of this vibrant region,” he said.
The centre will provide significant growth prospects goingforward for Westfield Trust and the community. Future stages ofdevelopment at Westfield Fountain Gate already have pre-committedmajor stores including Myer Megamart, Kmart Super Garden and aDavid Jones department store.
Westfield Trust today announced a distribution to unitholders of$214.0 million for the six months to 30 June 2001, an increase of16.1% over the previous corresponding period.
This represents a distribution of 11.42 cents per unit up 4.1%on last year, with 40% of the distribution tax advantaged.
The growth in distribution results from a combination of factors- existing centre income growth, contributions from recentlycompleted developments and transactions including the amalgamationof the St Lukes Group with Westfield Trust in NZ in August lastyear, the purchase of a 50% interest in Westfield Mt Druitt inSydney and the sale of a 50% interest in Indooroopilly in Brisbaneat the end of last year.
Westfield Managing Director, Mr Steven Lowy, said the result wassolid and reflected the strength of the Westfield Trust portfolioof regional shopping centres in a difficult retail tradingenvironment.
“Retail trading conditions in Australia have been more difficultin the past 12 months than at any time in recent years,” he said.”Despite the softer conditions, demand for space in the Trust’sexisting portfolio and new developments continues to be solid withthe vacancy level in existing centres remaining below 1%.”
The assets of Westfield Trust totalled $8.5 billion at 30 June2001, up 6.5% from the total at 30 June 2000. Unitholders’ equityattributable to members of Westfield Trust is $5.5 billion, up 3.4%over the year. The Trust’s net asset backing increased from $2.77to $2.87 per unit over the 12-month period. Five shopping centreswere revalued during the period, two in Australia resulting in arevaluation surplus of $26.3 million and three in NZ resulting in arevaluation surplus of $14.8 million.
Retail sales in Westfield Trust’s 28 Australian centres totalled$8.0 billion, up 8.9% for the 12 months to 30 June 2001. On acomparable basis, retail sales increased by 0.5% with specialtystores up 0.7 % over the previous corresponding period.*
Comparable sales were affected by the fact that one-third of theportfolio had been recently re-launched following majorredevelopment or is currently undergoing redevelopment. Since Julylast year conditions have been soft particularly in relation todepartment stores and fashion-related categories whereas discountdepartment stores, supermarkets and food-related specialties haveperformed relatively well.
In this period, the Trust’s continuing redevelopment program sawthe completion of Stage Two of the $360 million Westfield Hornsbyproject on Sydney’s upper North Shore.
For the first time, long-established Sydney retailer Gowingswill open a store in a regional shopping centre at the redevelopedHornsby and one of the world’s largest book, music and videoretailers, Borders, will open its third Sydney store at Hornsby. Weexpect the completion of this major project by the end of the year,including the opening of David Jones, Target and Westfield’sbranded entertainment and lifestyle precinct The Street.
Stage Two of the $190 million redevelopment of Westfield FountainGate in Melbourne’s south-east opened successfully in March 2001,with the entire project due for completion in late 2001.
Plans are progressing for a number of major redevelopments acrossthe portfolio with the redevelopment of Westfield Bondi Junction inSydney due to start in the first half of next year.
Retail sales for the year at Westfield shopping centres in NZincreased 5.2% to NZ$1.3 billion. On a comparable basis, thisrepresented an increase of 1.1% over the previous correspondingperiod, with specialties up 1.2%. The vacancy level in Westfield’sNZ centres is also below 1%.
In NZ Westfield Trust owns 11 centres and is undertaking a NZ$1billion redevelopment program for the portfolio.
In July work was completed on the redevelopment of WestfieldShoppingtown Westcity in Auckland. The NZ$84 million projectincluded The Street for the first time in NZ and the centre hastraded well since re-opening.
In May the Trust announced the acquisition of the remaining 50%interest in the Manukau shopping centre from its partner in thecentre, AXA New Zealand for NZ$83 million. The centre has 136retailers and generates annual sales of NZ$180.4 million.
Plans are also being finalised for the redevelopment of WestfieldShoppingtowns St Lukes and Queensgate which are expected tocommence later in 2001.
Mr Lowy said Westfield Trust shopping centres in Australia andNew Zealand enjoyed strong positions in their respectivemarkets.
“The ongoing redevelopment program is designed to ensure the Trustshopping centres continue to meet changing retail environment andprovide future earnings and capital growth.
“We expect that distributions to unitholders will continue to growin the second half of this year,” he said.
*Due to the introduction of the GST in Australia last yearWestfield Trust has defined retail sales as gross consumerspending. That is, retail sales provided by retailers plus anadjustment for GST. From 1 July 2000, retailers provided salesfigures excluding GST and adjustments for the new tax regime arebased on estimates supplied by Jebb Holland Dimasi.