Friday 14 March 2014

Westfield Distances Itself From Australian Retailing

In an interesting move the Westfield Group is planning to split its Domestic Australian shopping centre business from its international interests.

According to Bloomberg, “Westfield Group, which is increasing its focus on higher-return activities including development, is distancing itself from Australia and New Zealand, where it expects to see the slowest growth this year. The Sydney-based company spun off half of its Australian and New Zealand malls into Westfield Retail Trust in 2010, and billionaire co-founder Frank Lowy and his family sold their 7.1 percent stake in the trust in February.”

Westfield is seen to get much better returns from overseas with specialty rent increase of 3.8% in US and 2.7% in UK compared with only 1.8% in Australia. Westfield have invested heavily in the giant theme park like centres overseas which seem to have greater potential than Australia’s humble shopping centres.

In a particularly critical article this week the Sydney Morning Herald blamed part of the retail rip-off in Australia on the high domestic rents charged by Westfield.