Westfield chief determined his firm will fight for its patch

By Campbell McIlroy

Friday 19th October 2001

Westfield managing director Steven Lowy is adamant the company will fight to protect its patch on behalf of its tenants and its shareholders.

At a press conference held during Mr Lowy's visit to Auckland this week The National Business Review asked whether Westfield had a policy on competitive objections to resource consents.

Mr Lowy said the company had a policy of looking after its investors and making sure its competitors worked within the guidelines. "We make investment decisions based on a certain set of rules and we have an obligation to make sure our competitors do so."

Mr Lowy said this was especially true when competitors tried to have sites rezoned to fit their proposed developments.

The irony was not lost on those attending the interview given Westfield's attempts to rezone public roads in Newmarket and Pakuranga, and rezoning in St Lukes to expand its shopping centres.

The question was asked in the context of Two Double Seven still needing to gain resource consents to develop its "Extreme" site and would seem to indicate Westfield will be odds on to object.

Mr Lowy's statements may also raise an eyebrow or two in the Environment Court, which has increasingly frowned upon competitive objectors.

But Mr Lowy said the company was not afraid of competition and Two Double Seven's development plans would have no effect on the viability of its own plans in Newmarket.

"One of our most successful centres is Chatswood in Sydney which has a competitor right across the road."

He said he believed the product the company could put on the ground would be competitive and Westfield wouldn't be here if it did not think the site was viable, even with competitors across the road.

"We have a responsibility to spend our money wisely and if we can't lease it we've got a very, very big problem."

But he said the company did not build for one economic cycle and it had usually done well in weaker cycles because when the climate improved the company was there to take advantage of it.

That's something shareholders would be hard-pressed to disagree with.

Westfield Trust shareholders have earned a 14.5% compounded rate of return since April 1997. Westfield Holdings announced a 14% increase in after-tax profit for the year to June 30 of $A169 million, and Westfield Trust announced a 16.1% increase in its distribution to unitholders of $214 million for the same period.

While the aftermath of September 11 had not affected Westfield's New Zealand and UK stores, there had been a downturn in the US and Australia.

However, Mr Lowy said he still expected next year's result to be ahead of this year's.

He said the company's investment returns would not be affected as they were based on long-term leases, and he did not think funds management fees would be materially affected.

There are also big dividends for New Zealand as Mr Lowy estimated each dollar the company spent in its $1 billion investment programme had a 1.75 multiplier effect in the economy and would create 30,000 jobs.

Westfield's strategic plan is to merge Dutch-based US mall operator Rodamco North America, for which it has launched a $1.2 billion hostile takeover bid, with its Westfield America Trust and have dual listings in the US and Holland.

If Westfield pulls off the deal it would make it the second-largest mall operator in the US, with 80 shopping centres, and the second largest in the world.

Mr Lowy said the company would look to expand by redeveloping the centres it owned and by increasing the number of shopping centres in the markets in which it operated.

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