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Westfield Trust Reports 16.1% Increase In Profit

Westfield Trust today announced a distribution to unitholders of $214.0 million for the six months to 30 June 2001, an increase of 16.1% over the previous corresponding period.

This represents a distribution of 11.42 cents per unit up 4.1% on last year, with 40% of the distribution tax advantaged.

The growth in distribution results from a combination of factors - existing centre income growth, contributions from recently completed developments and transactions including the amalgamation of the St Lukes Group with Westfield Trust in NZ in August last year, the purchase of a 50% interest in Westfield Mt Druitt in Sydney and the sale of a 50% interest in Indooroopilly in Brisbane at the end of last year.

Westfield Managing Director, Mr Steven Lowy, said the result was solid and reflected the strength of the Westfield Trust portfolio of regional shopping centres in a difficult retail trading environment.

“Retail trading conditions in Australia have been more difficult in the past 12 months than at any time in recent years,” he said. “Despite the softer conditions, demand for space in the Trust’s existing portfolio and new developments continues to be solid with the vacancy level in existing centres remaining below 1%.”

The assets of Westfield Trust totalled $8.5 billion at 30 June 2001, up 6.5% from the total at 30 June 2000. Unitholders’ equity attributable to members of Westfield Trust is $5.5 billion, up 3.4% over the year. The Trust’s net asset backing increased from $2.77 to $2.87 per unit over the 12-month period. Five shopping centres were revalued during the period, two in Australia resulting in a revaluation surplus of $26.3 million and three in NZ resulting in a revaluation surplus of $14.8 million.

Australia

Retail sales in Westfield Trust’s 28 Australian centres totalled $8.0 billion, up 8.9% for the 12 months to 30 June 2001. On a comparable basis, retail sales increased by 0.5% with specialty stores up 0.7 % over the previous corresponding period.*

Comparable sales were affected by the fact that one-third of the portfolio had been recently re-launched following major redevelopment or is currently undergoing redevelopment. Since July last year conditions have been soft particularly in relation to department stores and fashion-related categories whereas discount department stores, supermarkets and food-related specialties have performed relatively well.

*Due to the introduction of the GST in Australia last year Westfield Trust has defined retail sales as gross consumer spending. That is, retail sales provided by retailers plus an adjustment for GST. From 1 July 2000, retailers provided sales figures excluding GST and adjustments for the new tax regime are based on estimates supplied by Jebb Holland Dimasi.
In this period, the Trust’s continuing redevelopment program saw the completion of Stage Two of the $360 million Westfield Hornsby project on Sydney’s upper North Shore.

For the first time, long-established Sydney retailer Gowings will open a store in a regional shopping centre at the redeveloped Hornsby and one of the world’s largest book, music and video retailers, Borders, will open its third Sydney store at Hornsby. We expect the completion of this major project by the end of the year, including the opening of David Jones, Target and Westfield’s branded entertainment and lifestyle precinct The Street.

Stage Two of the $190 million redevelopment of Westfield Fountain Gate in Melbourne’s south-east opened successfully in March 2001, with the entire project due for completion in late 2001.

Plans are progressing for a number of major redevelopments across the portfolio with the redevelopment of Westfield Bondi Junction in Sydney due to start in the first half of next year.

New Zealand

Retail sales for the year at Westfield shopping centres in NZ increased 5.2% to NZ$1.3 billion. On a comparable basis, this represented an increase of 1.1% over the previous corresponding period, with specialties up 1.2%. The vacancy level in Westfield’s NZ centres is also below 1%.

In NZ Westfield Trust owns 11 centres and is undertaking a NZ$1 billion redevelopment program for the portfolio.

In July work was completed on the redevelopment of Westfield Shoppingtown Westcity in Auckland. The NZ$84 million project included The Street for the first time in NZ and the centre has traded well since re-opening.

In May the Trust announced the acquisition of the remaining 50% interest in the Manukau shopping centre from its partner in the centre, AXA New Zealand for NZ$83 million. The centre has 136 retailers and generates annual sales of NZ$180.4 million.

Plans are also being finalised for the redevelopment of Westfield Shoppingtowns St Lukes and Queensgate which are expected to commence later in 2001.

Outlook
Mr Lowy said Westfield Trust shopping centres in Australia and New Zealand enjoyed strong positions in their respective markets.

“The ongoing redevelopment program is designed to ensure the Trust shopping centres continue to meet changing retail environment and provide future earnings and capital growth.

“We expect that distributions to unitholders will continue to grow in the second half of this year,” he said.

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