Westfield Trust increases distribution to $330.7 million

01 February 2000

Countries: Australia

Westfield Trust today announced a distribution to unitholders of$330.7 million for the year to 31 December 1999, an increase of25.5% on last year.

The result represents 21.41 cents per unit, a 4.03% increase overlast year’s 20.58 cents per unit, with 54.4% of the distributiontax advantaged.

Westfield Managing Director, Mr Steven Lowy, said Directors werepleased with the result for the year which was slightly aboveexpectations.

Westfield Trust’s total assets increased by 35.5% during 1999from $5.43 billion to $7.36 billion. Unitholders’ equity atDecember 1999 was up 17.5% on the previous year from $3.83 billionto $4.50 billion. Net asset backing of the Trust increased from$2.57 per unit at December 1998 to $2.72 per unit at December 1999,up 5.8%. Eight Australian properties were revalued during the yearresulting in a revaluation surplus of $162.8 million.

Demand by retailers for space in Westfield Shoppingtownsremained strong, with occupancy levels continuing to exceed 99% ofretail space. This was achieved in a year when more than 700 newstores were opened across the portfolio which now contains over5,750 retail outlets. These new stores were primarily in newprojects – including major redevelopments at Chatswood in Sydney,Carousel in Perth, Southland in Melbourne and Chermside in Brisbane- which either have opened or are expected to open fully leasedupon completion.

Retail sales in Westfield Shoppingtowns for the year were alsostrong, up 5.9% to $6.69 billion. The increase on a comparablebasis was 4.7%. The year was capped off by one of the bestChristmas trading periods in recent times, with sales in Decemberup 5.2% over the previous year.

Specialty stores traded well during the year, with comparablesales increasing by 4.6%. Of particular note was the strong tradingresults achieved by department stores with sales growth of 7.3% forthe 12-month period.

“This is a strong result driven by the quality of the shoppingcentres themselves which continue to adapt and improve to meetconsumer demand,” Mr Lowy said.

“At the same time, we are experiencing a strong retail salesenvironment and Westfield’s intensive management approach hasmaintained our high occupancy levels and the successful, ongoingredevelopment program.”

As in past years the quality of the Westfield shopping centreportfolio underpinned the trading performance, especially inredeveloped centres such as Parramatta and Miranda in Sydney,Marion in Adelaide, Indooroopilly in Brisbane and Carousel.

One of the key contributors to the success of these centres hasbeen the introduction of greatly improved entertainment and leisureprecincts. The success of these precincts has benefited retailersin the centres by providing an additional driver of consumertraffic.

During the year, Westfield launched the first of its new-lookentertainment precincts – The Street at Southland – and its initialsuccess led to the introduction of The Street at Carousel, withplans to extend the concept as part of upcoming redevelopments atWestfield Shoppingtowns Burwood and Chatswood in Sydney andChermside.

The Street is the next generation of entertainment andleisure choice for Westfield Shoppingtowns and builds on thesuccess of entertainment offered at centres such as Parramatta,Miranda, Marion, Tuggerah and Indooropilly.

The key role of cinemas in attracting customers to The Streetprecincts was underscored during the December/January schoolholiday period when cinemas in Westfield Shoppingtowns Southland,Marion and Carousel were among the top 10 highest-grossing cinemacomplexes in Australia, with Marion remaining in top spot.

The Trust’s investment program in new developments was the mainfocus of activities during the year and each of these projects hasmet or exceeded expectations in terms of leasing, retail tradingperformance and economic return.

A number of factors are driving the demand for theseredevelopments. These include changes in people’s social andworking lives – less time, more affluence, more single-personhouseholds, higher density living. This has led to increasingdemand for the wider choice and greater convenience andentertainment that shopping centres offer.

During the year, the $210 million Carousel project was completedsuccessfully. Most stages of the $205 million redevelopment ofChatswood had opened by November 1999 and the final section of theredevelopment, a Hoyts multiplex and restaurants, is scheduled toopen in March 2000.

In addition, construction continued on three major projects.Southland ($310 million) is a joint venture project with AMP and isscheduled for completion in May 2000, while Chermside ($235million) and Burwood ($300 million) are expected to be completedlater this year.

Planning for the redevelopments of Westfield ShoppingtownsHornsby and Bondi Junction in Sydney and Fountain Gate in Melbournecontinued during the year. Construction at Hornsby and FountainGate is expected to start shortly.

Westfield Trust also acquired interests in three shopping centresduring the year which has further enhanced the premium quality ofthe Westfield Trust portfolio.

The Trust acquired the remaining 50% interests in WestfieldShoppingtowns Parramatta and Liverpool in Sydney from Rodamco for$536 million. Parramatta Shoppingtown is one of Australia’stop-ranking shopping centres with $580 million in annual retailsales. Liverpool Shoppingtown is another strong performer in theWestfield Trust portfolio with sales of $287 million as at 31December 1999.

Westfield Trust purchased a 25% interest in Carindale ShoppingCentre in Brisbane for $92 million through its investment in theCarindale Property Trust (formerly the Suncorp Property Trust).Carindale is a 108,852 square metre shopping centre with 253specialty stores, parking space for 5,200 cars and the onlyshopping centre in Brisbane to feature two department stores??? David Jones and Myer.

During the year, the St Lukes Group in New Zealand – in whichWestfield Trust has a 46.4% interest – continued to perform well.Highlights of the year included the acquisition of QueensgateShopping Centre in Wellington for NZ$135 million and the securingof a major development site in Newmarket, Auckland. In addition, aNZ$100 million development at Glenfield, Auckland is progressingwell and St Lukes has announced plans for a NZ$80 million expansionof WestCity Shopping Centre in Auckland this year.

Mr Lowy said Westfield Trust was well placed for the future giventhe underlying strength of its shopping centre assets and that itwas expected that distributions would continue to grow in thecoming year.