Westfield America Trust reports strong earnings growth

10 August 1999

Countries: United States

Westfield America Trust today announced a profit after tax ofA$54.5 million for the six months to 30 June 1999, up 38.7% on thesame period last year.

This represents 6.01 cents per unit, an increase of 25.7% overthe corresponding period last year.

The underlying US dollar earnings per unit increased 7.1%, withthe balance of the increase due to a substantially lower exchangerate for the current period (1999: US$0.6535; 1998: US$0.7674).

The profit, principally derived from the Trust’s investment inWestfield America, Inc., is after US withholding tax for whichAustralian investors receive a tax credit.

Specialty store sales in the portfolio for the half-year to June1999 were US$1.4 billion reflecting a 5.3% increase over the sameperiod last year on a comparable basis. Specialty store space was92% leased at 30 June.

Westfield Managing Director Mr Peter Lowy said: “WestfieldAmerica’s performance in the first six months of this yearcontinues our positive momentum. Retail sales across our portfolioare very solid and for the second consecutive quarter we are seeingexcellent sales from the women’s fashion category which is leadingthe strong sales results.”

“We continue to achieve increases in operating income, mallsales per square metre and base rents, and we’re on target with ourredevelopment schedule involving a number of our primeproperties.”

“A highlight of the year to date has been the integration of thecentres that we acquired last year into the Westfield managementsystem and to brand all of our centres as WestfieldShoppingtowns.”

Westfield America Trust has a 47.0% economic interest inWestfield America, Inc., a listed US real estate investment trustwhich owns a 3.2 million square metre portfolio of 37 shoppingcentres in selected metropolitan areas of eight states in theUS.

Highlights during the period:

Property transactions

  • In June, Westfield America, Inc. sold Los Cerritos centre inLos Angeles, which was originally acquired in November 1998 as partof the TrizecHahn portfolio acquisition, and signed a major dealwith JP Morgan as joint venture partner for a 50% share in twoflagship properties: Westfield Shoppingtown Valley Fair (San Jose,California) and Westfield Shoppingtown UTC (formerly UniversityTowne Centre in La Jolla, California). These transactions raisedUS$180 million of funds which were used to reduce debt and willhelp finance further expansion.
  • During the period, Westfield America, Inc. outlaid US$43million to acquire the remaining 32% interest in WestfieldShoppingtown Wheaton Plaza (Wheaton, Maryland) and an additional15% interest in Westfield Shoppingtown Independence Mall(Willmington, North Carolina).


As a result of Westfield’s branding initiative, which is gainingmomentum, Westfield America entered a five year strategic agreementwith The Coca-Cola Company to market beverages at Westfield’s 37regional and super-regional Shoppingtowns throughout the U.S. Therelationship includes development of joint branded promotionalactivities across the Westfield America portfolio which willenhance the Westfield Shoppingtown brand in its markets.


During the first half of the year, construction was underway ata number of Westfield Shoppingtowns:

  • Annapolis Mall, (Annapolis, Maryland) – a US$22 millionredevelopment incorporating a new multi-screen cinema complex andspecialty stores due for completion in the second quarter 2000.Construction began in June.
  • Connecticut Post Mall, (Milford, Connecticut) – a US$28 millionredevelopment which will add an 18,000 square metre Searsdepartment store and 4,100 square metres of specialty stores, forcompletion in the second quarter 2000.
  • Crestwood Plaza, (St. Louis, Missouri) ?? a US$7 millionaddition of 2,500 square metres of new specialty stores to becompleted in the third quarter this year.
  • Meriden Square, (Meriden, Connecticut) ?? a US$38million redevelopment adding a new 8,400 square metre Lord &Taylor anchor, 6,500 square metres of new specialties and a threelevel parking structure. The development is scheduled to open inSeptember 1999.
  • Mid Rivers, (St Peters, Missouri) – a US$14 millionredevelopment incorporating a new multi-screen cinema complex and5,800 square metres of leasable space. Construction began in thefirst quarter with the project scheduled for completion in mid2000.
  • Valley Fair, (San Jose, California) ?? a US$150 millionredevelopment with a 21,000 square metre Nordstrom department storeand approximately 26,000 square metres of specialty stores. Thefirst stage of the development, a parking structure for 1,400 carswas completed in May 1999 and construction began on a secondparking structure. The project is scheduled for completion in thesecond half of 2001.

Financial Information

As at 30 June 1999, Westfield America Trust had a marketcapitalisation of A$1.4 billion.

Total assets of the Trust were up 53.5% to US$4.2 billion (A$6.4billion) at 30 June 1999, while equity attributable to Unit Holderswas US$784 million, (A$ 1.19 billion) up 3.0% from 30 June1998.

At 30 June 1999, net asset backing per Unit was US$0.87 (A$1.31),as compared with US$0.84 (A$1.38) a year ago, and the Trust’sgearing ratio was 48.1%.

An interim distribution of 6.01 cents per unit, representing a30.7% increase over the distribution per unit for the first half of1998, will be paid on 31 August 1999 to holders of Units as at therecord date 19 August 1999. A dividend reinvestment program willcome into operation for this distribution.

The Westfield Group Finance Director, Mr. Stephen Johns, said: “Weare confident of achieving further income growth in the second halffrom Westfield America’s shopping centre portfolio, which,depending on the prevailing US dollar exchange rate, should lead toincreased distributions to Unit Holders.

Summary of Westfield America Trust’s
1999 First Half Earnings Results

Profit summary



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A$ cents

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Operating profit before tax andabnormals







US withholdingtax

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Operating profit after tax







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* cpu % change: shows percentage increase in cents per Unitamounts over first half 1998 result