Growth helps keep Westfield on track

MELBOURNE - Westfield Group, the world's top shopping mall owner by market value, said yesterday it was on track to meet its 2005 earnings forecasts on the back of high occupancy rates and strong sales growth.

Westfield's shopping centres in Australia and New Zealand had an occupancy rate of more than 99.5 per cent as at March 31, while the occupancy rate was 93.3 per cent in the United States and more than 99 per cent in Britain.

Retail sales growth at its Australian malls accelerated in the first quarter to end-March with growth of 6.4 per cent, compared with growth of 6.1 per cent in the 12 months to March 31. In the United States, first-quarter retail sales growth was 6.2 per cent, up from an annual rate of 5.1 per cent.

"Westfield reported very solid sales numbers but we do expect things to slow over the coming six to nine months," said UBS analyst Kim Wright.

In New Zealand, total retail sales dipped 0.2 per cent in the March quarter. The Reserve Bank of New Zealand has been raising interest rates and maintains a hawkish outlook on rates.

In a quarterly update, Westfield confirmed an estimated distribution for 2005 of 106.5 cents per security, unchanged from a February forecast, and earnings of 95.6 cents per security.

Westfield stock has gained 0.6 per cent since the end of 2004, outpacing a 6.1 per cent decline in the property index.

Westfield, formed last July from the merger of the mall developer and its two property trusts, swung to a profit in the six months to December 31 from a combined loss a year ago when it was three separate entities.

It said retail sales at its malls grew 6.1 per cent in Australia to A$15.6 billion ($16.5 billion) in the year to March 31, while New Zealand retail sales rose 2.8 per cent to $1.6 billion and US retail sales rose 5.1 per cent to US$6.9 billion.

Westfield plans to use the rental income from its combined 126 shopping malls for A$2.8 billion expansion in US and Europe.

- REUTERS