Westfield Trust celebrates 20th anniversary with 8.0% increase in profit to $475.8 million
04 February 2003
Westfield Trust today announced a profit after tax of $475.8 million for the year ended 31 December 2002, an increase of 8.0% on last year.
The result represents a distribution of 23.55 cents per unit, a 2.75% increase over last year’s 22.92 cents per unit, with approximately 35% of the distribution tax advantaged.
The growth in distribution reflects a number of factors, including existing centre income growth, contributions from recently completed developments and acquisitions from the previous year.
Westfield Managing Director Steven Lowy said directors were pleased with the result for the year which was in line with expectations.
The assets of Westfield Trust totalled $9.7 billion at 31 December 2002, up 7.8% from $9.0 billion last year. Total unitholders’ equity is $6.3 billion, up 8.6% from $5.8 billion last year.
The Trust’s net asset backing increased from $2.95 per unit at 31 December 2001 to $3.09 per unit at 31 December 2002, up 4.7%, largely due to revaluations of 10 Australian shopping centres and three New Zealand shopping centres reflecting a revaluation surplus of $254.8 million.
During the year, Westfield Trust celebrated its 20th anniversary of listing on the Australian Stock Exchange. Since listing in 1982 the Trust has achieved a compound annual return of 16.1% compared with the Australian Stock Exchange Property Index return of 14.1 % and the Australian Stock Exchange All Ordinaries Index return of 13.9%.
When it listed in 1982 Westfield Trust had six properties in Australia’s three eastern states, gross assets of $128 million and a market capitalisation of $130 million.
Now 20 years later, Westfield Trust has 41 properties in Australia and New Zealand, gross assets of $9.7 billion and a market capitalisation of $7.2 billion making it the largest Australian listed property trust representing approximately 15% of the property trust index.
Retail sales in Westfield Trust’s 29 Australian centres totalled $9.0 billion for the 12 months to 31 December 2002, an increase of 6.2% over last year. On a comparable basis this represents an increase of 4.8%. In particular, specialty sales performance was strong throughout most of the year, with specialty store sales growth increasing progressively in every quarter of 2002, with fashion, footwear, jewellery, food, general merchandise and houseware categories performing particularly well. For the full year, specialty store sales were up 5.9% on a comparable basis.
Retail sales in Westfield Trust’s 12 New Zealand centres totalled $NZ1.5 billion for the 12 months to 31 December 2002, representing an increase of 3.7%. On a comparable basis sales increased by 2.6% for the 12 months.
Demand by retailers for space in Westfield Trust’s Australian and New Zealand shopping centre portfolio remained strong, with occupancy levels continuing to exceed 99% of retail space.
Steven Lowy said: “The results were pleasing, highlighting the strength of the Trust’s shopping centre portfolio, the Westfield team’s intensive management focus and the sound retail environment.”
In Australia, work on the $680 million Bondi Junction project is on schedule. The leasing program, which was officially launched to local and international retailers in August 2002, is progressing very well. Construction is on schedule and the project is expected to be completed in stages with the final stage opening in 2004.
Work also continues on the $30 million Homemaker Retail Campus at Fountain Gate in Melbourne. Stage one, comprising Coles Myer’s Megamart, and Kmart Garden Super Centre opened successfully in December. Stage two, comprising Warehouse and a number of smaller bulky goods retailers is expected to be completed in first half of 2003.
Construction is also well under way for the $67 million first stage of the North Lakes shopping centre, in Brisbane’s north, which is on schedule for completion in late 2003.
In New Zealand, work on the $NZ55 million project at St Lukes in Auckland, New Zealand’s premier retail location, is nearing completion. Stage one, which involved the addition of specialty stores and a full centre refurbishment, opened successfully in November and is trading well. The remaining stages, including cinemas and restaurants, are expected to be completed in late 2003.
In September 2002, the Trust announced it had entered into a joint venture with Auckland One Ltd, the owner of the Two Double Seven shopping centre in Newmarket, to collectively own and redevelop their joint land holdings.
Newmarket is one of Auckland’s premier retail markets and the combination of the land holdings, representing approximately 7 hectares, will allow for a new master plan development, which will build on Two Double Seven’s fashion statement. The development is expected to comprise department stores, discount department stores, fashion precincts, restaurants and cafes, and is expected to rank among the top centres in New Zealand.
Planning work is also well advanced for new investment projects at Doncaster in Melbourne, Centrepoint and Liverpool in Sydney and Innaloo in Perth. In New Zealand, planning is under way for redevelopments at Queensgate in Wellington and Riccarton in Christchurch.
On the basis of current retail conditions and the underlying strength of Westfield Trust’s shopping centre assets, the directors expect profit after tax and distribution per unit to increase during 2003.