WESTFIELD chairman Frank Lowy told shareholders at the annual general meeting that the group remains strong and stable.
Lowy said the global economy is currently going through an uncertain time.
“I’ve seen all this before. I have been around for a while, as you know… I am able to report to you that Westfield Group remains strong and stable,” he said.
Lowy said the group’s stability is built on three things – high quality assets with stable cash flows; financial strength and discipline; and, experienced management which plans for the long-term.
As a result, he said reconfirm the distribution forecast for 2008 at 106.5 cents per security.
Lowy said the group has recycled capital through asset sales – by disposing of some properties and reinvesting the proceeds in centres that can generate higher, long-term returns.
“We are not in the business of growing by acquisition simply to get bigger. The number of shopping centres we own is not as important as the return we can generate on the capital invested,” he added. “We also continually review our portfolio and from time to time sell centres that don’t fit with our long-term plans, or acquire new centres where they can add value,”
Lowy said in the first few months of this year it is certainly true that retail sales but more than 98% of the group’s rental income comes from contracted minimum base rents which are not affected by short-term movements in retail sales.
“Our shopping centres have strong positions in their particular markets and we continually redevelop them to make sure they maintain that position. Having high quality assets is always important of course, but it becomes a critical factor during times like this when lower quality properties are more vulnerable.
“Secondly, our assets are geographically diverse. We have 118 centres spread across four countries which means that each market is affected to varying degrees during a global downturn. Over the past few months for example, the Australian retail sales have been somewhat more resilient than those in the
Lowy said you can have high quality assets, but to maximise the return on those assets, in good times and in bad times, there is no substitute for good management.
At December 31 2007 the group had assets of $50.8 billion, $7.7 billion of available liquidity and gearing of 31.7%.
Australian Property Journal