Westfield America Trust reports increased profit exceeds prospectus forecast

27 January 1998

Countries: United States

Westfield America Trust (WAT) today announced a profit of A$75.4million for the year to 31 December 1997.

This profit is after allowing for US withholding tax (for whichAustralian investors receive a tax credit) and will result in afull year’s cash distribution of 9.26 cents per unit, a 9.2%increase over the annualised distribution for WAT’s initial periodof operation, the half year to 31 December 1996.

1997 earnings before withholding tax are A$81.2 million,representing 9.98 cents per unit of which approximately 52% is taxadvantaged. This represents an annualised increase of 7.5% over thehalf year to 31 December 1996.

These results exceed the forecasts in the Prospectus issued atthe time of WAT’S listing in 1996.

Prospectus and prior year return comparison
(Australian cents per unit)

1997
Prospectus Forecast

1997
Actual

1997/1996
% increase

1996
Annualised

1996
Actual
(Half Year Only)

Earnings before
Withholding Tax

9.97

9.98

+ 7.5%

9.28

4.64

Cash distribution

9.02

9.26

+ 9.2%

8.48

4.24

WAT has a 50.8% interest in Westfield America, Inc. (WEA), alisted US real estate investment trust which currently owns a 2.2million square metre portfolio of 22 regional shopping centres andthree power centres in the major metropolitan areas of seven statesin the US.

Retail sales for mall stores in the centres in 1997 were US$1.44billion representing a 4.4% increase over last year on a comparablesquare foot basis. Mall store space was 93% leased at 31 December1997, excluding centres under development.

Westfield Managing Director USA, Mr Peter Lowy, said that 1997was an important year for expanding Westfield’s shopping centreportfolio in the US and the listing of WEA on the New York StockExchange in May has provided a strong financial base for futuregrowth.

Acquisitions

Since January 1997 WEA has made five property acquisitionstotalling US$456 million.

– Annapolis Mall, Maryland/Washington DC – ownership was increasedfrom 30% to 100% at a cost of US$133.0 million.

– Meriden Square, Connecticut – ownership was increased from 50% to100% at a cost of US$54.5 million.

– Wheaton Plaza, Maryland/Washington DC – acquired a 68% interestin this 102,000 square metre centre for US$51.0 million.

– Northwest Plaza, St. Louis, Missouri – purchased 100% of thelargest enclosed centre of 167,000 square metres in St. Louis forUS$111.0 million.

– Crestwood Plaza, St. Louis, Missouri – since year end 100% ofthis 95,000 square metre centre was acquired for US$106.4million.

Redevelopment Activity

During the year under review four redevelopments were completedat: Eastland Shopping Center (Los Angeles, California), EnfieldSquare (Enfield, Connecticut), Mission Valley Center (San Diego,California) and South Shore Mall (Bayshore, New York). Developmentwork is currently under way for a new power centre at MissionValley Center – West comprising big box retailers andrestaurants.
New redevelopments are currently planned for the following fourcentres :

– West County Center, St. Louis, Missouri – In May 1997, Westfieldsecured commitments from both Nordstrom and the May Company’s Lord& Taylor division to open new anchor department stores at WestCounty Center as part of a major redevelopment planned for openingin late 2001.

– Annapolis Mall, Maryland/Washington DC – An additional Lord &Taylor department store as well as 1,100 square metres of specialtystores are planned for late 1998.

– Meriden Square, Meriden, Connecticut – An additional Lord &Taylor department store as well as 6,500 square metres of specialtystores are planned for completion in late 1999.

– South Shore Mall, Bayshore, New York – An additional Lord &Taylor department store is planned for completion in late 1998.

Financial Information

WAT is the fourth largest property trust listed on the ASX witha market capitalisation at 31 December 1997 of A$1.06 billion.

Net asset backing per unit increased from A$1.03 at December1996 to A$1.22 at December 1997 which reflects the strengthening ofthe US dollar in relation to the Australian dollar and therevaluation of 5 shopping centres.

The total annual return to WAT unitholders for the year ended 31December 1997 based on the ASX accumulation index was 25.5%compared to the ASX Property Trust Index return of 20.3% and an AllOrdinaries return of 12.2%. For the 18 months since inception ofWAT the annualised return to unitholders is 26.2% as compared tothe Property Trust Index of 22.8% and the All Ordinaries Index of15.3%.

The Westfield Group Finance Director, Mr Stephen Johns said thatbarring unforeseen circumstances, unitholders’ 1998 income shouldexceed the WAT Prospectus forecast.

Future Outlook

Mr Peter Lowy said: “We are confident in our ability to meet our1998 goals of increasing occupancy, increasing income andimplementing our redevelopment plans. With a strong US economy,excellent retail markets, and well located regional centres,Westfield America is well positioned for 1998 and beyond. We willalso continue to pursue acquisitions that can provide marketsynergies and redevelopment opportunities for the portfolio.”

Westfield America Trust
Financial Results for the year ended 31 December 1997

The consolidated financial results of Westfield America Trust andWestfield America, Inc. are as follows:-

1. Balance Sheet

A$

US$

Total Assets (million)

3,886.92

539.3

TotalLiabilities (million)

1,916.51

254.6

Net Assets (million)

1,970.41

284.7

Equity attributable toUnitholders of WAT (million)

1,000.2

652.1

Net Asset Backing per Unit

1.22

0.79

2. Profit & Loss

A$

US$

Westfield America, Inc. PropertyIncome (million)

147.3

112.7

Earnings before Withholding Taxattributable to Unitholders of WAT (million)

81.2

63.4

Distributable Income
(after Withholding Tax) attributable to Unitholders of WAT(million)

75.4

58.9

Westfield America Trust
Financial Results for the year ended 31 December 1997

3. Return per Unit
ASX Code:WFA

Year Ended 31 December 1997

Number of Units: 822.4million

Aus – Cents
per Unit

US – Cents
per Unit

Pre-tax earnings

9.98

7.79

Withholding tax

0.72

0.56

Cash distribution

9.26

7.23