27 August 2008

The Westfield Group (ASX:WDC) today announced its half year results, reporting operational segment earnings for the six months ended 30 June 2008 of $928 million, up 14.7%. This represents 47.82 cents per security, an increase of 5.5% on a constant currency basis.

The amount available for distribution for the six months, arising from operational segment earnings and related income hedging, was $1,036 million of which $1,033 million will be distributed, representing 53.25 cents per security.

Westfield Group Managing Directors, Peter Lowy and Steven Lowy, said: We are pleased with the performance of the business in what is a challenging environment.

Our focus on the management and redevelopment of, and investment in, our high quality global portfolio together with the capital management and portfolio initiatives transacted over the last few years has ensured the Group is in a strong position to continue to deliver growth.

Net profit, including asset revaluations and mark to market adjustments for the half year, was $1,285 million.

At 30 June 2008, the Group had total assets of $51.8 billion, gearing of 32.9% and available liquidity of $7.3 billion. The Groups strong balance sheet and single A credit rating ensures it is well placed to access capital markets globally. Since the start of this year the Group has issued or extended an aggregate of $2.1 billion of debt.

During the six months, development gains totalled $211 million with three projects completed at a total cost of $475 million (WDC share $265 million) delivering a weighted average development yield of 9.4%.

Net revaluation of the portfolio excluding redevelopments was up $37 million reflecting increases in comparable net operating income globally, stable valuation capitalisation rates in Australia and higher capitalisation rates for the United Kingdom, United States and New Zealand portfolios. This resulted in valuation increases in Australia that more than offset the valuation decrements in the other markets.

Operating highlights for the half year from the Groups 118 shopping centres include:

  • Comparable shopping centre net operating income growth of 3.2%
  • Comparable retail sales growth for the six months in Australia +4.9%, New Zealand (0.2)%, United States (1.9)% and United Kingdom +0.4%
  • Portfolio leased at 97.3%
  • Strong leasing activity with over 2,445 lease deals completed, representing approximately 460,900 square metres of retail space.

As at 30 June, the Group had 11 major projects underway at a forecast cost of $8.3 billion (WDC share $6.7 billion).

The Group will complete five projects in the 2nd half of this year at an aggregate cost of $4.5 billion (WDC share $3.0 billion) including Westfield London, which will open on October 30th. There is solid retailer demand for these projects, all of which are leasing up well.

The $3 billion (1.45 billion) development of Stratford, adjacent to the site of the 2012 Olympic Games, recently commenced and is expected to be completed in 2011 with a forecast development yield in the range of 7.00% – 7.50%.

The Sydney City project is scheduled to commence later this year and together with Stratford, will represent in excess of $4 billion of project starts in 2008.

Stratford and Sydney City are two unique world class retail opportunities. The fundamentals for these projects are strong and we are confident of achieving long term ungeared internal rates of return of 12% to 15%, Messrs Lowy said.


The Westfield Groups quality global portfolio, with high occupancy levels and long term leases based on minimum contracted rents, generates strong and stable cash flows that have been resilient through economic cycles. The combination of the Groups strong financial position and value creating development programme ensures that the Westfield Group is well positioned to deliver sustainable long term growth.

For 2008, the Group forecasts operational earnings growth of around 5.5% per security, on a constant currency basis.

The distribution forecast for the 2008 year remains unchanged at 106.5 cents per security, arising from operational segment earnings and related income hedging.


The Westfield Group (ASX Code: WDC) is an internally managed, vertically integrated, shopping centre group undertaking ownership, development, design, construction, funds/asset management, property management, leasing and marketing activities and employing in excess of 5,000 staff worldwide. It has investment interests in 118 shopping centres across Australia, the United States, the United Kingdom and New Zealand, encompassing in excess of 23,000 retail outlets. With a total value of assets under management of approximately A$63 billion, the Westfield Group is the largest retail property group in the world by equity market capitalisation.