wdc in last nights 4 corners, page-31

""In some cases, one-quarter or more of shopping centers are now empty, and the decline - or even the demise - of a mall can have a devastating economic and social impact.""


Big Louis, one difference between the US and Australian retail property market, is that the US has many more mid-sized and small cities than Australia, where land is very cheap and they have a throw-away culture of building small low-grade shopping centers, and then build a whole new one half a mile down the road when the first one gets a bit shabby.

A lot of the US developers do not seem to have woken up to the fact that when large cities run out of easily developable farmland, the sites for large malls become unobtainable and the established large ones establish very profitable quasi-monopolies. This is plainly evident in Australia's larger cities where Westfield have achieved a virtual monopoly.

As one of the Lowy sons actually said on the ABC last night, he builds malls to last 200 years.

While small crappy malls may come and go ( and I am personally familiar with at least a dozen of the ones Centro unfortunately bought in the USA ), I don't think you will be seeing any empty Westfield malls any time soon.

While I have some issues with governance at Westfield and question whether the appropriate balance exists between delivering value to the shareholders versus the executives, their actually business looks pretty good to me.