Westfield Group has announced a restructure across its local and international operations to merge the Group’s Australian and New Zealand business with the Westfield Retail Trust (WRT), creating a new locally-led company known as Scentre Group.
The move will see the local division of Westfield Group (WDC) separated from international operations, now known as Westfield Corporation, with two separately-listed companies on the Australian Securities Exchange (ASX) targeted at different investors. While the two entities will have separate boards and management teams, current chairman and figurehead of Westfield Group, Frank Lowy, will be chairman of both companies.
Speaking about the restructure, Lowy said it would lead to greater efficiencies and the potential for individual goals and growth.
Westfield’s international business and its Australian/NZ business have both grown in scale and quality to the stage where they can now stand on their own. They can each operate more efficiently, and generate greater growth and value for investors, by being independent.
Merging WDC’s Australian/NZ business with WRT will create Scentre Group, the largest REIT [Real Estate Investment Trust] on the ASX, and present a retail property investment opportunity that has not existed in Australia since the 1970s before Westfield first expanded overseas.
Our current structure has served us well, but we believe that this new structure will create more value for investors going forward.
Both companies are large and strong enough to operate independently of each other and this proposal allows them to pursue their individual strategic goals and financing plans. The proposal provides investors with a clear choice as to what they invest in, both in terms of geographic and currency exposure.
According to a statement from Westfield Group the local business will offer investors a “proxy for investing in Australian retail real estate” while the international business will lure investors with its “portfolio of iconic assets in major world cities”.
Locally, the new Scentre Group will have $28.5 billion in assets with “interests” in 47 centres across Australia and New Zealand. In real world terms, local operations generate annual retail sales of $22 billion and foot traffic from more than 555 million annual customer visits.
Moving forward, Scentre Group — which will continue to be branded as Westfield — is working on projects worth $1.2 billion, including new centres in Miranda (Sydney) and Mt Gravatt (Brisbane), and the company also has plans for future projects in Warringah (Sydney), Chermside (Brisbane) and Marion (Adelaide) totalling $3 billion.