Westfield America Trust increases distribution by 19% to $527.0 million

12 February 2004

Countries: United States

All amounts in this media release are in Australian dollars, unless otherwise stated.

Westfield America Trust (ASX: WFA) today announced a 2003 full-year distribution of $572.9 million, which represents an increase of 19.0% over the prior year distribution. On a per unit basis the distribution increased by 5.3% to 16.11 cents.

This result is in line with expectations and was underpinned by improved operational performance, which offset the increase in the currency since the Trust reported its half-year result to the market in August 2003.

This is a pleasing result at a time when US retail sales have been showing signs of improvement. The strength of Westfields underlying operations and its intensive management focus has seen our business perform well and continue to produce sound results, said Westfield America Trust Managing Director Peter Lowy.

December 2003


cents per unit

Profit before Tax:

Trading Activities



Capital Profits*





Less Withholding Tax



Profit after Tax



Capital Profit Retained*



2003 Total Distribution



2002 Total Distribution



% increase (year on year)



* The Capital Profit amount of $23.9 million has not been distributed.

The Trusts portfolio now consists of 66 shopping centres, with a gross asset value of US$10.9 billion and generates retail sales of approximately US$15 billion a year.

Operational performance

During the year, comparable sales per square foot in the Trusts US centres increased by 1.8% over the 2002-year to US$384. Sales began to show improvement in early 2003 for the first time since September 2001, recording nine months of consecutive sales increases to December of 2003. For the December 2003 quarter, comparable sales were 3.2% higher than the fourth quarter of 2002.

At December 2003 the portfolio was 94% leased, unchanged from the prior year. The average portfolio rent of US$36.31 per square foot represents a 3.6% increase over December 2002.

Property transactions

During the 12 months ending December 2003, the Trust acquired interests in five centres valued at approximately US$1 billion increasing the Trusts presence in the San Francisco (California), Chicago (Illinois) and Tampa (Florida) markets.

In January 2003, the Trust bought Southgate Plaza shopping centre in Sarasota, Florida for US$62 million;

In August, the Trust bought for US$105 million a 33% interest in The Shops at North Bridge in Chicago, Illinois;

In September the Trust bought Sarasota Square shopping centre in Sarasota, Florida for US$77 million;

In November, the Trust bought Louis Joliet Mall in suburban Chicago for US$92.5 million; and

In December, the Trust signed a US$410 million joint venture agreement with Forest City Enterprises for the acquisition of a 50% interest and development of the Emporium Site which is adjacent to the Trusts Westfield San Francisco Centre in San Francisco, California.

Investment projects

During the year Westfield America Trust completed projects at four Westfield Shoppingtowns with a total capital expenditure of US$204 million. Oakridge in San Jose, California, completed a US$141 million redevelopment and expansion in October. In June, the US$35 million mall renovation of Palm Desert in Palm Springs, California was completed. The US$16 million redevelopment of Great Northern in Cleveland, Ohio, was completed in March 2003 and the US$12 million redevelopment of Capital, in Olympia, Washington, was completed in October 2003.

The Trust now has US$770 million of investment projects under way including major redevelopments at the following Westfield Shoppingtowns:

US$113 million redevelopment of Franklin Park, in Toledo, Ohio;

US$111 million redevelopment of Wheaton, in Wheaton, Maryland;

US$98 million redevelopment of Santa Anita in Los Angeles, California;

US$26 million redevelopment of Parkway, in San Diego, California;

US$410 million redevelopment of the San Francisco Centre and the adjacent former Emporium department store. Westfield America has a 50% interest in the project; and

US$11 million redevelopment of Gateway, in Lincoln, Nebraska.

Construction is also expected to commence shortly on three major expansion projects at Century City (US$127 million) and Topanga (US$230 million), both in Los Angeles, California, and Connecticut Post (US$120 million) in Milford, Connecticut. In addition a further eight projects have been identified and are expected to start by the end of 2005. The total value of these 11 projects is approximately US$1 billion.

World Trade Center

Last December, Westfield America settled a transaction with The Port Authority of New York and New Jersey for the sale of the company’s interest in the World Trade Center retail premises for US$140 million. This allows Westfield America to recover its initial investment and associated costs and resulted in the Trust recording a US$1.9 million gain on the sale. In connection with the sale, Westfield America obtained from the Port Authority, for US$1 million, a right of first offer on the retail portion of any new development on the site. In addition, Westfield is providing consulting services to the Port Authority in relation to the retail development of the site.

Taubman Centers, Inc.

In October Westfield America and Simon Property Group (NYSE: SPG) withdrew their offer for all outstanding common shares of Taubman Centers, Inc. (NYSE: TCO). The US$7.7 million cost of the bid has been expensed against the capital gain recognised on the sale of other assets.

Financial transactions and net tangible assets (NTA)

During the 12-month period Westfield America raised equity capital of $567 million comprising $412 million through the Dividend Reinvestment Plan and $155 million on the conversion of the final installment of the Partly Paid Units.

The Trusts net tangible assets per unit increased by 8.5% in US dollar terms from US94 cents at 31 December 2002 to US102 cents at 31 December 2003. The A$ net tangible assets per unit at 31 December 2003 was $1.35 compared to $1.66 the prior year. The change in the A$ net tangible assets per unit was impacted by an increase in the AUD/USD exchange rate.

Property revaluations and gearing

During the year, 24 shopping centres and other sundry assets were revalued resulting in a revaluation surplus of US$292.1 million. At 31 December 2003, the Trust had total assets of US$10.9 billion, compared with assets of US$9.8 billion at December 2002. At 31 December 2003 the leverage ratio of the Trust was 44.8%.

Assets with a value of US$291.4 million were sold during the year, which after allowing for the costs in relation to the Taubman bid resulted in the Trust recording a one-off profit of $23.9 million.

Hedging program for US$ earnings

The Trust has a hedging program designed to reduce volatility of earnings as a result of movements in the AUD/USD exchange rate. Under the policy, between 80% and 95% of current-year income is hedged.


Directors believe that, on the basis of a continuation of the current retail environment in the US, the quality of the US portfolio will provide a foundation for growth in profits and distributions in 2004.