Westfield Trust reports 16.1% increase in profit
09 August 2001
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.