Westfield's Multimillion Pound Loss

But White City retail sales hold up well

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The Westfield Group has reported a loss of £363million in the first six months of this year – but retail sales at the White City shopping centre grew by 4.8% in the same period.

The Australian group, which owns 119 shopping malls in Australia, New Zealand, the U.S. and the U.K., said weaker sales in the U.S. and the decline in property values had led to the overall loss.

But despite the writedowns, Westfield announced that its operational earnings, which includes rental income, were £531million – a 12.1% increase on the last six months of 2008.

The U.K. was the worst performing region with operating income dropping 4.1 percent compared with 0.6 percent in the U.S. and 6.2 percent growth in Australia.

Earlier this year, Westfield cut the cost of its service charges at most of its UK malls by about 10 percent in a move it said was designed to help its regional shopping centres survive the recession.

Of the current half-year results, Westfield Group Managing Directors, Peter Lowy and Steven Lowy, said: “The Group continued to deliver solid underlying earnings for the half year. The Australian portfolio is performing above our expectations while conditions are stabilising, albeit at lower levels, in the more challenging environments in the United States, the United Kingdom and New Zealand.”

Occupancy rates were also reported to be up and the company said 97.3% of its shop space across the UK was let. The news comes despite a shaky start for some businesses at the White City centre: before its first anniversary, the Westfield shopping centre has already lost restaurants such as Ito, Esca and Tibits as well as shops such as Blooming Marvellous, Principles and the Nysa Wine Boutique.

However, figures show that the W12 mall is trading relatively well: for the six months to 30 June 2009, retail sales for the Group’s centres in Australia grew by 5.1%, in New Zealand they were down by 0.2% and the United States declined by 6.2%. In the United Kingdom, however, industry statistics show retail sales in London grew by 4.8% and were up 0.5% nationally, the company says.

August 28, 2009