Westfield to deliver its verdict on retail Turi Condon, Property editor From: The Australian August 14, 2010 12:00AM
IN May, Westfield Group managing director Steven Lowy said the giant retail landlord had reignited its development plans.
A stronger Australian retail sector and an improving outlook in the US were the key factors in the revival.
Westfield's half-year profit result is due out on Wednesday, and analysts and fund managers wonder whether there will be a change of heart at the world's biggest shopping centre owner as retail sales continue to weaken on both sides of the Pacific.
In Australia this week, streetwear brand and Westfield tenant Ed Hardy collapsed into administration.
And figures released earlier this month show retail sales rose only 0.2 per cent in May, with the annual growth rate of 1.9 per cent far below the long-term average of close to 6 per cent.
Maxim Asset Management managing director Winston Sammut said Westfield's half-year result was expected to be in line with market expectations of $875 million to $880m.
Its development timetable and the impact of this on earnings, the outlook for retail sales in Australia and the US, and merger and acquisition activity were the main areas to watch, Mr Sammut said.
"The issue is, will the development pipeline continue given the state of the (retail) market."
At Westfield's first-quarter briefing, joint managing director Steven Lowy said: "We are getting more confident in the short term but certainly more confident in the medium to longer term -- particularly in Australia."
Westfield said it expected to start more than $1 billion worth of development in 2010 -- $800m in Australia and $US200m ($220m) in the US.
Big developments already under way are the pound stg. 1.45bn ($2.52bn) Stratford City in London and the $1.2bn Sydney City project.
In May, Mr Lowy said the group had done pre-development work on projects valued at $10bn and would spend between $500m and $1bn a year on development.
Westfield will pay a distribution of 32c a security for the June half on August 31. Its full (calendar) year forecast is 64c.
