Australia - Net Profit Rise 31% In H1 For Westfield
August 16, 2012
Westfield said that net profit rose to AUD 800 million for the first six months of the year, but revenue dropped to AUD 1.213 billion.
The largest shopping mall landlord in Australia reported a 31% increase in net profits for H1 2012, despite a drop in revenue.
Westfield said that for January to June this year, its net profit rose to AUD 800 million on revenue of AUD 1.213 billion - a fall of 10.7% from the AUD 1.358 billion recorded in same period last year.
This was amidst a backdrop of subdued retailing in Australia despite strong overall macro-economic conditions.
Over H1 2012, Australian speciality stores grew by 0.8%, with Westfield Sydney emerging as the strongest-performing store in the Australian portfolio in terms of speciality sales. There were no figures for individual shopping centres provided.
The Westfield brand also benefited from the London Olympics - over 5.5 million visitors thronged through Westfield Stratford City where the two-week sporting event was held, boosting UK retailing in general - during which it received "unprecedented exposure to a global audience".
Westfield chief executives Peter and Steven Lowy reaffirmed the group's earlier forecast of a distribution of 49.5 Australian cents per security, but said that retailers should be wary of a challenging market ahead.
They said that retailers faced a volatile economic environment during which the retail market will remain subdued.
"We are clearly in an environment of soft retailing, we need a spark to kick things off," said Peter Lowy. "On the macro-scale the country is strong, but there does need to be a spark at the consumer level."
Australian retail had been lacklustre for three years, dating back to just prior to the government stimulus programme when all taxpayers received AUD 900 to spend. This was aimed at staving off recession during the global financial crisis.
However, Peter and Steven Lowry emphasised that Westfield maintained a strong financial position, with net property income rising 7% to just over AUD 1 billion for H1 2012. In addition, the group's comparable net property income growth was the strongest in Australia, up 3.3% from its 42 shopping centres.
Its US portfolio of 47 stores recorded comparable net property income of 2.5%, while its UK portfolio recorded 0.9% growth.
In Australia, Westfield's portfolio remains over 99.5% leased, with a 3.2% increase in average speciality store rent to AUD 1,524 per sq m. Its global portfolio is 97.5% leased.
Over the first six months of the year, the group leased out 194,000 sq m of retail space through 1,529 leasing deals. It also completed the development of Westfield Sydney, allowing the property to have the highest speciality sales productivity in the portfolio.
The group has AUD 1.5 billion worth of projects under construction at present, with AUD 1.2 billion attributed to it. Westfield has invested AUD 500 million in these projects so far.
Tags: Real estate investment, Business space, Income properties