Westfield books profits, new projects on anvil in the US and UK

Westfield Corporation (WFD) has said that for the 12 months ended December 31, 2015 funds from operation were 783 million dollars, representing 37.7 cents per security and in-line with forecast. WFD reported an IFRS net profit of 2.3 billion dollars for the year.

“The performance of our pre-eminent portfolio remains strong and we continue to make significant progress on our development program. During 2015, WFD completed over one billion in projects; commenced 2.5 billion dollars of projects including Century City in Los Angeles, UTC in San Diego and Westfield London; completed the 925 million dollars joint venture of three regional assets in the US; and divested six non-core assets for 1.3 billion dollars. We are well on our way in executing our strategy to create and operate flagship assets in leading markets,” said Westfield Corporation Co-CEOs, Peter Lowy and Steven Lowy.

Financial review of WFD

WFD has assets under management of 29 billion dollars, of which 82 percent are flagship assets. WFD’s portfolio achieved specialty sales increased 6.4 percent with flagship portfolio specialty sales up 8 percent; and regional portfolio specialty sales were up 3.2 percent. For the 12 month period, comparable net operating income for the portfolio was up 3.9 percent with flagship portfolio up 4.2 percent and regional portfolio up 2.7 percent.

New projects implemented during the year

During 2015, WFD continued to make significant progress on the development program. The Group completed the 250 million dollars development at The Village at Topanga in Los Angeles and the 260 million pounds (364 million dollars) Bradford development in the UK, on behalf of a third party. WFD has 3.7 billion dollars of projects in progress, including the 1.4billion dollars Westfield World Trade Center, New York; the 800 million dollars redevelopment of Century City, Los Angeles; the 585 million dollars expansion of UTC, San Diego and the 600 million pounds (841 million dollars) expansion of Westfield London.

Westfield World Trade Center, which is now fully leased, will showcase a diverse mix of over 100 domestic and international fashion, dining, beauty, entertainment and technology retailers, is scheduled to open in August 2016. WFD is making good progress at Century City, to be anchored by a new Nordstrom and Macy’s and a refurbished Bloomingdales department store. UTC is also progressing well and will be anchored by a new Nordstrom department store. At Westfield London the company recently commenced the retail expansion, anchored by a new John Lewis department store. The project is expected to open in 2018 and, on completion, Westfield London will become the largest shopping centre in Europe.

Predevelopment work continues on the expansion at Valley Fair in Silicon Valley, to be anchored by a new Bloomingdales department store. This project is expected to commence this year. Predevelopment activity also progresses at Westfield Milan in Italy, anchored by Galeries Lafayette department store, and at Croydon in South London. These projects are expected to commence between 2017 and 2018.

Outlook for the year ahead

After taking into account the dilution from the non-core asset divestments in late 2015 and lost income from the Century City development , WFD expects to achieve FFO for the 2016 year of between 34.2 and 34.5 cents per security. This represents pro-forma growth of between 3 percent and 4 percent from 2015. The distribution forecast for the 2016 year is 25.1 cents per security.