Challenge is to keep up pace
SCENTRE GROUP, the A$18.4 billion slice of the Westfield empire which now controls the Australian and New Zealand assets might have slipped when reporting last week but investors are still well ahead.
Chief executive Peter Allen said the controversial restructure had created near A$4.5 billion of extra value.
The former Westfield Retail Trust was 25 per cent ahead of where it was when the proposal was announced early last December. And Westfield Group investors are up 20 per cent.
Chairman Frank Lowy said the market had embraced the change to Scentre Group and Westfield Corporation.
‘‘I am pleased that we have successfully implemented the restructure of Westfield Group and Westfield Retail Trust, creating substantial value for both sets of security holders,’’ he said
The challenge is to keep up the momentum. His first focus is on the organisation, ‘‘to make sure we are working with a common purpose and increasing our efficiency.’’
Allen said the positive June 30 results point to growth in funds from operations (FFO) in 2015 and beyond.
‘‘The consumer is not broke,’’ he said. ‘‘We have to make sure we have the right retailers, selling goods at the right price points.’’
Some of the change in tenancy and consequent negative leasing spreads is due to a change in the tenancy mix.
Much of the focus has been on potential asset sales, particularly as Scentre is committed to reducing gearing. Gearing will drop as new developments are completed and the trust, with the best Moody’s rating of any real-estate investment trust, is not under financial pressure.
Allen said the group was looking at its strategy for each asset, based on the assumed return, the cost of
‘The consumer is not broke. We have to make sure we have the right retailers, selling goods at the right price points.’