Westfield in $790 million four-way property transaction with Deutsche Diversified Trust

04 August 2004

Countries: Australia

The Westfield Group (ASX: WDC) today formed four new joint ventures with Deutsche Diversified Trust (ASX: DDF) with the announcement of a $790 million property transaction.

This transaction expands our relationship with DB Real Estate and provides the group with additional quality shopping centres, which will have Westfield management, and further redevelopment opportunities, said the Westfield Groups managing director Steven Lowy.

As a result of this transaction Westfield will have investments in a portfolio of property assets totalling $34.7 billion, an increase of $668 million.

Under the transaction Westfield will:

  • acquire from DDF a 50% interest in Whitford City shopping centre in Perth, Western Australia, for $184.5 million at a property yield of 7.0%. Westfield will also acquire a 50% interest in an adjacent bulky goods property for $8.0 million at a property yield of 9.0%.
  • acquire from DDF a 50% interest in West Lakes Mall in Adelaide, South Australia, for $122.5 million, at a property yield of 7.4%.
  • acquire from DDF a 50% interest in Plenty Valley Town Centre in Melbourne, Victoria, for $10.25 million at a property yield of 8.0%. Westfield will also acquire a 50% interest in the adjacent parcel of land for $8.75 million.
  • sell to DDF a 50% interest in its North Lakes shopping centre and adjacent land in Brisbane, Queensland for $61 million at a property yield of 7.25% for the centre.

As a consequence of this transaction, Westfield will outlay $273 million (before acquisition costs), which will be funded from the groups existing debt facilities. At the completion of this transaction, Westfields gearing is forecast to be approximately 42.7%.

Whilst the transaction is accretive to earnings it will have no material effect on the distribution forecasts for the periods to June 2006 as contained in the Explanatory Memorandum issued to investors in May 2004 as part of the merger of Westfield Trust, Westfield America Trust and Westfield Holdings Limited.

We are pleased with the outcome of this transaction as Whitford City and West Lakes Mall are quality shopping centres in established metropolitan markets of Perth and Adelaide, said Steven Lowy.

Plenty Valley Town Centre represents a rare opportunity to acquire a small centre on 50 hectares of land in one of Melbournes major growth corridors with significant development opportunities in the future.

This deal expands the Westfield and DB Real Estate relationship to seven joint ventures which include three existing joint ventures in Westfield Miranda, Hurstville and Mt Druitt, all in Sydney, New South Wales.

Settlement of all properties is anticipated to take place on 20 August 2004 with the exception of West Lakes which is expected to settle on 31 March 2005 in line with the anticipated completion of the current development.


FACT SHEET Centres Acquired

Whitford City is an established shopping centre located 24 kms north-west fromthe Perth CBD in Western Australia. An $85 million redevelopment has recently been completed at the centre which now comprises a total area of approximately 68,400 square metres and includes Target, Big W, Woolworths, Action supermarket, Greater Union cinemas and more than 200 specialty retailers. There is also 3,000 square metres of office suites in a freestanding building on the site. The 9,400 square metre bulky good centre is located across the road and is anchored by Bunnings.

West Lakes Mall is an established shopping centre located 14 kms north-west of the Adelaide CBD in South Australia. On completion of its current redevelopment, scheduled for March 2005, the centre is forecast to have a total area of approximately 62,000 square metres including David Jones, Kmart, Harris Scarfe, Woolworths, Coles, Reading cinemas, and more than 140 specialty retailers.

Plenty Valley Town Centre is a 5,700 square metre convenience centre anchored by Coles supermarket with approximately 23 specialty retailers. The centre offers significant redevelopment opportunities over the medium to long term. Plenty Valley Town Centre is located on a site of approximately 50 hectares at South Morang, 25 kms north of the Melbourne CBD, in one of the citys main growth corridors. The trade area population is forecast to grow at a rate of 4.5% per annum over the next ten years while retail spend in the trade area is forecast to more than double over the next ten years to $1.2 billion in 2014 representing an average annual growth rate of 8.0%1.

1Source: Urbis JHD Research