This article is from the Australian Property Journal archive
BULLISH Westfield Group is kick-starting a new project in San Diego, California – its first major development in the United States since 2007.
Yesterday Westfield posted a net profit of $2.306 billion for the full year to December 31 2010, before one off accounting adjustments and charges in relation to the establishment of the Westfield Retail Trust. In the same period last year Westfield made a net loss of $458 million.
After adjusting for WRT, Westfield reported a statutory net profit was $1.114 billion for 2010.
The group’s net profit for the year included property revaluations of $1.135 billion of which $399 million were development gains and $736 million were from the existing portfolio.
Operational segment earnings were $2.063 billion representing 89.6 cents per security, in line with forecast and distribution was 63.56 cents per security, also in line with forecast.
Development segment earnings were $227 million, down 1.5% due to the strong Australian dollar. Net property income, in local currency terms, was up 4.1% in Australia / New Zealand, down 1.1% in the United States and up 13.2% in the United Kingdom. The United Kingdom result was driven by the strong performance from Westfield London, Europe’s largest urban shopping centre.
For 2010, comparable specialty retail sales per square foot in the United States grew by 6.1%. In Australia comparable specialty retail sales declined slightly, by 0.4%, and in New Zealand grew by 0.4%. Westfield London, in its second year of operation, continued to perform exceptionally well with total sales in 2010 of £870 million, up 24.7% and up 18.8% on a comparable basis.
At December 31, the group had assets under management of $58.2 billion, balance sheet total assets of $37.2 billion, a gearing ratio of 38.4% and has available liquidity of $4.2 billion.
Westfield managing director Steven Lowy said demand for space continues to be strong and the group is now planning Westfield London’s next stage of development and expansion.
Westfield also plans to spend $750 million to $1 billion on new developments in near term, with works starting on Fountain Gate in Victoria.
Work will also restart on Westfield UTC, a super-regional shopping center in San Diego California, which will be the group’s first major new development in the US since 2007.
Westfield UTC comprises 99,012 sqm of space and 4,500 car spaces, the plans for the new UTC include three new department stores, more than 150 new boutiques and specialty shops, new movie theatre, an ice rink and 250 modern residential units with separate parking.
Managing director Peter Lowy said these projects are expected to generate consistent development gains over time with target unlevered internal rates of return of between 12% to 15% on invested capital.
Lowy is forecasting funds from operations to be in the range of 64 cents to 65 cents per security, not including gains from development activity, for 2011.
He reconfirmed operational segment earnings forecast of 74.6 cents per security and distribution of 48.4 cents per security for 2011.
Meanwhile the Westfield managed Carindale Property Trust posted a net profit of $12.8 million. Excluding IFRS fair value adjustments of $1.8 million, profit was $11.0 million which represents an increase of 15.5%.
Net property income totalled $14.2 million which represents an increase of 13.5%. This result includes non-recurring items of $1.0 million, mainly reflecting the finalisation of the Queensland government’s land tax assessment, excluding this, the underlying net property income growth was 5.1%.
The total distribution for the period of $9.7 million is equivalent to 13.90 cents per unit, an increase of 2.1%.
Australian Property Journal
