Australian Westfield shopping centres have proved highly resilient, with near record low vacancy rates and growing rents despite retail conditions continuing to be challenging.
Shopping centre owner Westfield Group announced on Wednesday that its annual profit has dropped by seven per cent due to its sale of several US malls and the buyback of its own securities.
But the company said the Australian business had performed well in tough but improving trading conditions.
“In Australia our portfolio remains strong and robust with vacancies near historic lows, improved retail sales environment, continued growth of average rents and comparable net operating income,” co-chief executive Steven Lowy said.
The company’s shopping centres in the US were 94.5 per cent leased, while UK shopping centres were 99.3 per cent leased and Australian and New Zealand centres were 99.5 per cent leased.
The company will spend $4.7 billion on construction projects which are currently underway including Mt Gravatt in Brisbane and Miranda in Sydney as well as Bradford in the UK.
It also plans to spend a further $3 billion on future development activities in Australia and New Zealand.
During the year, the group sold seven malls in the US, as well as joint venture interests in Brazil and Karrinyup in Western Australia.
Westfield Group also bought back 150.3 million securities in 2013, at an average price of $10.53 per security.
In December Westfield Group announced a restructure proposal to split its Australian and New Zealand business from its international business.
Under the proposal, the Australian and New Zealand business would merge with Westfield Retail Trust, a joint owner of Westfield’s Australian centres, to form Scentre Group.
The international business would become Westfield Corporation.
Westfield Group and Westfield Retail Trust shareholders are expected to meet in late May to vote on the proposal.