WESTFIELD RETAIL TRUST 
By Westfield Retail Trust Managing Director, Mr Domenic Panaccio said: "We have seen nine months of continued improvement in specialty retail sales, particularly with solid performance in the fashion, footwear and jewellery categories in the last quarter. We are encouraged by the performance of our portfolio with high occupancy and an improving trend in re-leasing spreads."
Highlights Comparable specialty sales growth of 4.3% in Australia and 3.6% in New Zealand for the March quarter
Average specialty rental growth of 1.4% comprising growth of 1.6% in Australia and 0.5% in New
Zealand
High occupancy with the shopping centres over 99.5% leased
Over 500 lease deals completed covering 70,000 sqm of retail space
Occupancy cost at 31 March 2014 of 19.1% across the portfolio
Good progress being made on the $309 million1 investment in current redevelopments at
Westfield Garden City and Westfield Miranda
Operating Performance
The portfolio's strong occupancy levels reflect continued retailer demand for quality space and high sales productivity with average specialty retail sales of $9,941 per square metre in Australia and NZ$8,619 per square metre in New Zealand for the 12 months to 31 March 2014.
Comparable specialty retail sales growth for the three months to 31 March 2014 was 4.3% in Australia and 3.6% in New Zealand.
Average specialty store rent at 31 March 2014 was $1,535 psm in Australia and NZ$1,132 psm in New Zealand, which represents growth of 1.4% across the portfolio for the 12 months. For the three months to March, rents on new leases in Australia representing 3.0% of specialty area (excluding projects), were 4.6% lower than expiring rents, reflecting an improvement on the trend in 2013.
For further details please refer to Annexure A.
1. Westfield Retail Trust share.
Redevelopment
Investing in our portfolio through redevelopments enhances the quality and market position of our assets and creates significant value with targeted total returns of between 12% to 15%.
Currently two centres are under redevelopment, at a total cost to the Trust of $309 million, both of which are expected to be substantially complete in late 2014.
The $400 million (Trust share: $200 million) redevelopment of Westfield Garden City (QLD), at Upper Mount Gravatt includes a new full line Myer, Target and over 100 new specialty retailers. The project will increase the gross lettable area of the centre by 42% to approximately 140,000 square metres and has an estimated yield on completion in the range of 6.75% to 7.25%.
The $435 million (Trust share: $109 million) redevelopment of Westfield Miranda (NSW) will increase the gross lettable area of the centre by 18% to approximately 127,000 square metres and will deliver a new standard of retail including a comprehensive tenancy mix and a dynamic dining, leisure and entertainment precinct. The project has an estimated yield on completion in the range of 6.50% to
7.00%.
The Trust has a redevelopment pipeline over the next five to seven years of over $1 billion (Trust share) which includes redevelopments at Westfield Chermside (QLD), Westfield Marion (SA) and Westfield Warringah Mall (NSW), with predevelopment works progressing well.
On 6 May 2014, Westfield Retail Trust announced a $300 million improvement in the merger terms in relation to the proposal to merge with Westfield Group's Australian and New Zealand business to form a new entity, Scentre Group (Revised Proposal).
The Revised Proposal has the unanimous support of the independent Directors and is subject to Securityholder approval at a meeting to be held on Thursday, 29 May 2014 at 2:00pm (AEST). For a proxy vote to be considered, it must be lodged with Computershare Investor Services Pty Limited no later than 2:00pm (AEST) on Tuesday, 27 May 2014.
Further information regarding the Revised Proposal is contained in the Supplementary Securityholder
Booklet dated 9 May 2014, which is available at www.westfieldretailtrust.com.
For the year ending 31 December 2014, the Trust is forecast to deliver funds from operations (FFO) of
20.4 cents per stapled security representing a 2.8% increase on the prior year. The distribution payout for 2014 is forecast to be 100% of FFO, being 20.4 cents per stapled security.
The 2014 forecast assumes comparable net operating income growth of 2.0% to 2.5% for Australia and no material change in the current operating environment. It excludes the impact of the Revised Proposal or any future capital transactions.
Under the Revised Proposal the 2014 pro forma forecast FFO2 for Scentre Group is 21.75 cents per stapled security which represents an increase of 6.6% on the Trust's 2014 forecast FFO.
2. Pro forma forecast FFO assumes implementation on 1 January 2014 as disclosed under the terms of the Revised Proposal.
For further information please contact:
Domenic Panaccio Brian Mackrill
Managing Director Chief Financial Officer
(+61 2) 9333 4800 (+61 2) 9333 4800
About Westfield Retail TrustWestfield Retail Trust (ASX Code: WRT) is Australia's largest listed real estate investment trust solely focused on Australia n and New Zealand retail property, with a total asset value of $14.0 billion at 31 December 2013. The Trust's principal investment is the joint venture ownership, alongside Westfield Group, in a high quality shopping centre portfolio comprising interests in 46 major shopping centres located predominantly in Australia with 9% of the Trust's shopping centre assets located in New Zealand.
This release contains forward-looking statements, including statements regarding future earnings and distributions. These forward-looking statements are not guarantees or predictions of future performance, and involve known and unknown risks, uncertainties and other factors, many of which are beyond our control, and which may cause actual results to differ materially from those expressed in the statements contained in this release. You should not place undue reliance on these forward-looking statements. These forward-looking statements are based on information available to us as of the date of this presentation. Except as required by law or regulation (including the ASX Listing Rules) we undertake no obligation to update these forward-looking statements.
Portfolio Retail Sales Performance | ||
TENANT TYPE | PERIOD TO 31 MARCH 2014 | |
TENANT TYPE | MAT 1 MAT1 GROWTH | COMPARABLE CHANGE2 |
TENANT TYPE | MAT 1 MAT1 GROWTH | 12 MONTHS 3 MONTHS |
Australia Majors 1.9% 0.3% Mini Majors (0.1)% 1.8% Specialties 2.3% 4.3% | ||
Total $19.3 billion 1.6% 2.0% 2.7% | ||
New Zealand Majors 0.3% 0.8% Mini Majors (7.2)% (5.6)% Specialties 1.7% 3.6% | ||
Total NZ$2.0 billion 0.0% 0.3% 1.7% |
Comparable Change in Specialty Retail Sales | |
REGION | PERIOD TO 31 MARCH 2014 |
REGION | COMPARABLE CHANGE2 |
REGION | 12 MONTHS 3 MONTHS |
NSW 3.4% 5.4% QLD 0.0% 0.7% VIC 1.4% 5.2% SA 3.4% 5.5% WA 2.6% 2.6% ACT (1.4)% 0.7% | |
Australia 2.3% 4.3% | |
New Zealand 1.7% 3.6% |
1. MAT - moving annual turnover - sales on a rolling 12 month basis.
2. Comparable change is based on $psm.
Comparable Change in Retail Sales - Australia
PERIOD TO 31 MARCH 2014 COMPARABLE CHANGE3 CATEGORY: 12 MONTHS 3 MONTHS MajorsDepartment Stores (0.4)% 1.5%
Discount Department Stores (1.9)% (4.7)% Supermarkets 6.4% 2.9%
Cinemas (1.7)% (3.5)%
Mini Majors (0.1)% 1.8% SpecialtiesFashion | 1.2% | 4.6% |
Food Catering | 2.2% | 1.1% |
Food Retail | 0.1% | 0.4% |
Footwear | 3.9% | 6.0% |
General Retail | 0.2% | 1.5% |
Homewares | (0.7)% | 0.4% |
Jewellery | 7.0% | 10.2% |
Leisure | 2.8% | 5.2% |
Retail Services | 2.8% | 4.7% |
Other Specialty Information
Specialty Retail Sales 12 months to 31 March 2014Australia $9,941 psm
New Zealand NZ$8,619 psm
Average Specialty Store Rent as at 31 March 2014Australia $1,535 psm
New Zealand NZ$1,132 psm
Average Specialty Store Rent Growth 31 March 20144Australia | 1.6% |
New Zealand | 0.5% |
Portfolio | 1.4% |
Portfolio 19.1%
3. Comparable change is based on $psm.
4. 31 March 2014 compared to 31 March 2013.
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