Westfield keeps NZ projects on the board

It's keeping its signalled plans to spend $900 million on developments in New Zealand firmly on the board.

And it says it is already seeing dividends from its investment in the development of the Glenfield and West City malls in Auckland.

Steven Lowy, Managing Director of Global Operations, says Westfield does not build for one economic cycle.

"We have got stronger in difficult economic cycles," Lowy says.

In 2000/01, Westfield posted a 14% rise in net profit to $A169.1 million.

Its surviving co-founder, Steven's father Frank, is Australia's second-richest man.

Westfield's annual report released on Tuesday shows he became a little bit richer with a $A1.5 million pay rise last year, giving him a take home pay of $A9.93 million in salary, incentives and other benefits.

Lowy's $A3.5 billion fortune places him second in Australia's 2001 Business Review Weekly rich list behind media mogul Kerry Packer.

Steven's co-managing director, brother Peter, who is based in the United States and focuses on the capital and new business side of the company, took home $US1.6 million ($A3.11 million).

Sydney-based Steven Lowy, who was paid $A2.1 million, was in Auckland this week to catch up with development progress here.

He says there is room for more shopping centres in New Zealand. They had only 15% of retail space here, compared with 30% in Australia and 50% in the United States.

Lowy is buoyed too that New Zealand, along with the United Kingdom, had not shown the same fallout in retail spending terms as had been seen in the United States and Australia post the September 11 attacks in the US.

Citing its Westfield Shopping Town Glenfield as an example of how Westfield can add value, Lowy said the North Shore City suburban mall will double its sales in the year following its redevelopment.

"It was doing $70 million - $80 million before we started and now its doing $160 million," Lowy said. "It takes awhile to stabilize the business (after a redevelopment), but it's already doubled."

Lowy says the next off the rank will be the redevelopment of St Lukes in Auckland and Queensgate in Wellington. They will be followed by Newmarket and a huge project in Albany in North Shore.

Lowy admits Westfield's projects are not always without controversy. But he says the company has a simple strategy. It will go where it can benefit its shareholders, retailers and consumers.

"If we can't we won't go there," he says.

But at the same time he says Westfield is competitive and it has the backing of a global pool of intellectual capital to transfer to its markets.

"The New Zealand market probably has enough shops, but the problem is the quality and location," he says.

Westfield's NZ manager John Widdup says Westfield's approach is based on a "centre's based policy". That means having commercial hubs where public transport and other infrastructure can be maximized rather than having urban spread.

Lowy says Westfield with its developments will be one of New Zealand's largest investors.

"For every dollar we spend here, it has a 1.75 multiplier on the local economy," he says.

That flows through into an estimated 30,000 jobs in construction, retail manufacturing, distribution and retail.

Westfield is divided into separate entities. Westfield Holdings is the management, design and development company. Its investments fall into Westfield Trust in Australasia and Westfield America Trust.

New Zealand makes up a small part of Westfield's growing portfolio in the US, UK and Australia.

Westfield, which Lowy says will become a brand as well known as Coca-Cola and McDonalds, had just signed up to leasing retail space of the World Trade Center in New York and announced plans to double that space, before the twin towers were decimated by the terrorist attacks.

Lowy says Westfield is fully insured for capital and business disruption, although many influences will determine the actual extent of its claim.

Now it is focusing its attention on its takeover of Rodamco North America (RNA). Lowy says while Westfield is not comfortable with the fact it has been taken as a hostile bid, RNA will provide it will the vehicle to become the second largest shopping centre company in the US, and pre-eminent in terms of quality of assets.

Westfield spent $A920 million for a 23.9% stake of RNA in August.

Lowy says it plans to merge the Dutch-based company with its Westfield America Trust and have a dual listing in Australia and The Netherlands.

Australian building products company James Hardie has just shifted its listing to The Netherlands to leverage tax advantages.

Lowy says Westfield's primary listing will remain in Australia.

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