Westfield Trust increases distribution to $433.2 million
31 January 2002
Westfield Trust today announced a distribution to unitholders of$433.2 million for the year to 31 December 2001, an increase of11.5% on last year.
The result represents a distribution of 22.92 cents per unit, a3.7% increase over last year’s 22.11 cents per unit, withapproximately 39% of the distribution tax advantaged.
The growth in distribution reflects a number of factors, includingexisting centre income growth, contributions from recentlycompleted developments as well as a number of capitaltransactions.
The 3-property transaction with AMP Henderson Global Investorsannounced in late 2001 is expected to have a positive effect ondistributions in 2002 and beyond.
The assets of Westfield Trust totalled $9.0 billion at 31December 2001, up 11.1% from $8.1 billion last year. Totalunitholders’ equity is $5.9 billion, up 9.3% from $5.4 billion lastyear.
The Trust’s net asset backing increased by 3.5%, from $2.85 perunit at December 2000 to $2.95 per unit at December 2001, largelydue to revaluations of a number of the Trust’s shoppingcentres.
Six Australian shopping centres and seven New Zealand shoppingcentres were revalued during the year, reflecting a revaluationsurplus of A$174.1 million.
Westfield Managing Director Steven Lowy said the Directors werepleased with the results which were achieved despite the difficultretail trading conditions which existed for most of the year.
Despite the softer conditions, demand for space in the existingportfolio and new projects continued to be solid with occupancylevels in the Australian and NZ shopping centres remaining inexcess of 99% of retail space.
Highlights of the year:
Retail sales at Westfield shopping centres in Australia totalled$8.5 billion, up 6.9% for the 12 months to 31 December 2001. On acomparable basis, retail sales increased by 1.0%, with specialtystore sales up 1.2%.
Softer conditions were experienced generally in department storesand the fashion category, although department store sales appearedto recover somewhat in the second six months. Food retailing andmost other categories of general retail continued to performsatisfactorily. Of particular note is the strong improvement incinema patronage which underpins the success of the entertainmentand lifestyle precincts of the centres.
Sales in recently completed redevelopments continue to grow andfurther demonstrate the benefits of the Trust’s redevelopmentprogram with strong sales increases, particularly during theChristmas period, recorded at Burwood in Sydney, Chermside andCarindale in Brisbane, Carousel in Perth and Southland inMelbourne.
Two major redevelopment projects costing $573 million werelaunched late last year: Hornsby in Sydney and Fountain Gate inMelbourne.
Both projects were completed successfully and featured a total of550 new specialty retailers, including 93 retailers who had notpreviously leased space in a Westfield shopping centre.
In December 2001, Westfield Trust and AMP completed a $555 million,3-property transaction involving Westfield Trust’s purchase of a50% interest in the Bondi Junction shopping centre, the acquisitionby Westfield Trust of the Centrepoint complex in Sydney from AMPand the sale to AMP of a 50% interest in Liverpool, with WestfieldTrust retaining the other 50%.
Over time, Westfield expects to significantly improve theappearance and ambience of the Centrepoint complex throughredevelopment and improving the retail mix and generate a strongerincome stream from the property.
Planning is now well advanced for the $675 million redevelopment ofBondi Junction in Sydney (now wholly owned by Westfield Trust)scheduled to commence in the first half of 2002.
The Bondi Junction redevelopment will consolidate three existingretail sites into one world-class shopping and entertainment centreto serve the high-income and under-served trade area in the easternsuburbs of Sydney. On completion the centre will compriseapproximately 100,000 square metres of retail space and is expectedto rank among the top few centres in the country.
Planning is also well underway for the redevelopment of Doncasterin Melbourne, Liverpool in Sydney and Innaloo in Perth. Inaddition, plans are being finalised for the construction of a newshopping centre at North Lakes in Brisbane. The total cost of theseprojects is estimated at $500 million.
A major focus for Westfield Trust’s New Zealand operations is theNZ$1 billion redevelopment program. The first two developments inthis program, the NZ$100 million development of Glenfield opened in2000 and the NZ$80 million redevelopment of WestCity opened in2001.
Westfield Trust is putting in place the building blocks forlong-term growth for unitholders through the redevelopment program,branding, and management and leasing strategies.
Construction has recently commenced on the redevelopment of theSt Lukes shopping centre in Auckland, which is already NZ’s premiershopping centre and the flagship of the Westfield Trust NZportfolio. The total cost of the project will be approximatelyNZ$55 million and is due for completion in the first half of2003.
Planning is well underway for the redevelopment of Queensgate inWellington and is due to commence in the second half of 2002.
Retail sales for the year at Westfield shopping centres in NewZealand were NZ$1.35 billion, representing an increase of 5.4%. Ona comparable basis sales increased by 0.9%. Specialty store saleswere up 1% on a comparable basis.
In November 2001, given the softer retail conditions prevailing atthat time, Directors indicated that distribution growth per unit in2002 would be approximately 2%.
However, given recent signs of improvement emerging in retailconditions and the underlying strength of the Westfield Trustportfolio, this forecast has been reviewed upwards and Directorsnow expect distribution growth per unit for 2002 to be in theregion of 2.75%.