Westfield Group announces half year result – continued strong performa in all markets

29 August 2006

Countries: Australia

The Westfield Group (ASX:WDC) today announced its half-year results, reporting operational segment earnings for the 6 months to 30 June 2006 of A$804 million, up 9.4% from the comparative period last year (on a constant currency basis). Operational segment earnings per security were 45.9 cents, an increase of 6.1%.

Net profit for the half year of A$3,376 million included property revaluations of A$2,695 million. The distribution of A$954.2 million represents 54.50 cents per security which is 6.7% ahead of the same period last year, and includes the distribution of $128 million of project profits. As announced in February, from 1st July 2006 project profits will no longer be distributed.

Operational highlights for the six months include:

  • comparable shopping centre net operating income growth of 4.8% in Australia and New Zealand, 4.3% in the United States and 5.9% in the United Kingdom.
  • close to 100% occupancy in Australia, New Zealand and the United Kingdom markets. In the US, the portfolio is currently 93.5% leased, in line with the same time last year.
  • consistent positive growth in retail sales in the United States, Australian and New Zealand markets with the United Kingdom also showing positive signs more recently.

Group Managing Directors, Peter Lowy and Steven Lowy, said: We are very pleased with the Groups performance, not only over the past 6 months but also in the period since the merger in July 2004.

The strong underlying performance in all four regions and the continued delivery of the Groups extensive development program has enabled the Group to meet the Explanatory Memorandum forecasts in every period in the past 2 years.

Since the merger the Groups shopping centre interests have grown by over A$16 billion to A$45.8 billion, an increase of 54.7%. Approximately A$8.7 billion of this increase is the result of the revaluation of the global shopping centre portfolio which has benefited from strong and consistent income growth, the positive impact of completed redevelopments, and a general increase in retail property valuations. Other contributors to this growth include new acquisitions of A$5.1 billion and redevelopment expenditure of A$4.5 billion offset by the disposal of non core assets of A$1 billion and foreign exchange movements.

The ability of the Group to continue to optimize operational performance, invest both in new assets and into its existing portfolio through redevelopments and, at the same time, efficiently recycle capital, are key ingredients for sustainable value creation, the Group Managing Directors said.

Currently the Group has 21 projects under construction at a forecast cost of A$8.0 billion (Westfield Group share A$5.6 billion). The size, scale and geographic spread of these projects are unprecedented in the Groups history. Major projects to be completed by December 2006 include the US$460 million downtown San Francisco development, the US$170 million Century City and US$350 million Topanga developments in Los Angeles and the A$200 million Chermside and A$205 million Liverpool redevelopments in Australia. These projects are at the leading edge of design and innovation within the global shopping centre industry.

During the 6 months to 30 June 2006 the portfolio was further strengthened through a series of strategic transactions including:

  • the acquisition of a further 75% interest in Stratford City (UK) now 100% controlled by Westfield Group adjacent to the site of the 2012 London Olympics, for 140 million. Stratford is the largest zoned retail site in London, and one of the largest in the UK. The location of the site on the east side of London City complements the Groups current 1.6 billion development at White City on Londons west side. Together, the two sites provide a unique opportunity for Westfield to gain a major presence in the London market.
  • the acquisition of 16 Federated department store sites at 12 Westfield centres in the US, creating the opportunity for 18 new developments with an estimated value of US$2 billion.
  • 3 new department store deals with David Jones in Australia.
  • the disposal of 8 non-core US assets for US$550 million.

The Group also recently announced that it has assumed responsibility for the design and construction of the White City (UK) project from Multiplex. As previously announced Westfield already has responsibility for the development, management and leasing of the project. The major tenants are now committed and we are pleased to announce that Marks and Spencer, Debenhams, Waitrose, Next and National Amusements Cinema de Luxe will each be creating flagship stores at White City.

The Group has previously indicated that it is in the process of investigating a number of capital management initiatives including the establishment of a wholesale funds management business. The review of wholesale fund opportunities is continuing with discussions now being held with interested parties with regard to an A$2 billion wholesale fund with interests in 6 Australian super regional and regional shopping centres.


Today the Group has interests in 120 shopping centres with a gross value of approximately A$56.8 billion, encompassing 22,000 retail outlets. The size and quality of the portfolio and its geographic diversity provide the foundation for sustainable superior income and capital growth.

Operational Segmentearnings are forecast to grow at approximately 6% on a constant currency basis for the 2006 calendar year. This reflects the underlying income growth from the existing portfolio and incremental income from completed developments.

The Directors reconfirm the distribution forecast for 2006 of 106.5 cents per stapled security.


The Westfield Group (ASX Code: WDC) is an internally managed, vertically integrated, shopping centre group undertaking ownership, development, design, construction, funds/asset management, property management, leasing and marketing activities and employing in excess of 4,000 staff worldwide. It has investment interests in 120 shopping centres in four countries, with a total value in excess of A$56 billion and is the largest retail property group in the world by equity market capitalisation.