With 640 new leases signed and rents up, Westfield records ‘modest’ sales growth

Shopping centre owner and landlord Westfield has reported “modest growth” in speciality retail sales in its Australian shopping centres for the first three months of the year. 

Comparable specialty sales in its Australian portfolio rose 1.1% over the March quarter compared with growth of 2.2% in Westfield London store and New Zealand stores and a 10.1% growth in the US. 

The group said for the year to March 2012, average specialty rent for the Australian / New Zealand portfolio grew by 3.1%.

“The first quarter of this year has been pleasing with the group’s operations performing in line with expectations. Importantly, we announced a number of strategic initiatives that we expect will enhance the group’s return on contributed equity and long term earnings growth profile,” say Westfield Group co-chief executives Peter Lowy and Steven Lowy.

“The productivity of our Australian portfolio continues to be high, with specialty sales of approximately $9,800 a square metre, near full occupancy and good demand for space in both existing centres and new developments such as Fountain Gate in Victoria and Carindale in Queensland.”

Speaking at today’s AGM Frank Lowy said the last year had been a period of stability for Westfield following the GFC, with the group weathering the crisis better than some of its competitors. 

Steven Lowy said that at the end of March, the global portfolio was 97.2% leased – with the United States portfolio at 91.6%, the UK at over 99% leased and the Australian/New Zealand portfolio remaining over 99.5%. 

“Last year we completed over 5,100 leasing transactions, or the equivalent of 10 large regional malls, across the entire portfolio. Approximately 3,000 of these leasing deals were to new retailers,” Steven Lowy said. 

“In the first quarter of this year, we have completed 1,100 leasing deals of which around 640 are to new retailers,” he added. 

During today’s AGM chairman Frank Lowy and Steven Lowy stressed the importance of malls being interactive and adapting to the changing needs of shoppers: 

“It is true that the retail industry is constantly changing. There are new types of retail, and the rapid take up of digital technology is changing how consumers think about shopping in all sorts of ways,” Steven Lowy said. 

“But I have witnessed constant change in the retail industry for more than 50 years. 

“The kinds of shopping centres we build today are unrecognisable from those of the 90s, let alone the 60s.” 

Steven Lowy said Westfield shopping centres needed to keep pace with the rapid evolution of digital technology to remain relevant. 

“We have introduced wi-fi to many of our centres and we are actively promoting our business online through the social media such as Facebook and Twitter. 

“As an example, when we opened Stratford in the UK last year, we used social media and online marketing techniques extensively in our launch campaign. 

“That campaign played an important role in helping us achieve over 1 million shopper visits to Stratford in the first week and an average of 800,000 customer visits per week since opening,” Steven Lowy said. 

Westfield expects 1.1 billion visits to shopping centres this year, generating spending of around $40 billion. 

“Our philosophy is to have very strong assets in very strong markets” Frank Lowy said, with the focus being on iconic and flagship projects such as the centres opened in London, the World Trade Centre project in New York and another project in in Milan.

Westfield announced to investors that its distribution for the 12 months was $1.1 billion or 48.4¢ per security, in line with its forecast at the start of 2011.





Larry Schlesinger

Larry Schlesinger

Larry Schlesinger was a property writer at Property Observer


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