Westfield escapes World Trade Center fallout

By Deborah Hill Cone

Friday 14th September 2001

BUSINESS AS USUAL: Westfield unscathed

The Australasian company with a $A228 million exposure to the World Trade Center collapse this week looked likely to escape major financial damage from the tragedy.

In July, mall giant Westfield Holdings signed a deal to lease the retail component of the twin towers for 99 years.

That plan, through Westfield America Trust which is 28.5% owned by Westfield Holdings, has been destroyed as the two towers collapsed.

But the company said it was fully insured for both capital and loss of income and the cover included acts of terrorism.

Westfield America Trust paid $A800 million for the 99- year lease.

Westfield, which is controlled by the billionaire Lowy family, put out a statement saying its thoughts were with one of its 10 staff New York staff who was still missing. The nine other staff had been accounted for.

The World Trade Center deal was signed with the Port Authority of New York and New Jersey by Westfield America and Silverstein Properties (which leased the office component of the towers).

The American Insurance Association said the risk of the World Trade Center being destroyed was spread across many companies. "The coverage on those properties is multilayered. No one insurer could or would face all that exposure," AIA director of public affairs told Dow Jones.

When the disaster struck Westfield Holdings was in the process of putting together a deal to pay $A920 million for a 24% stake in Dutch-based property group Rodamco North America.

Westfield owns 39 shopping centres in the US, 30 in Australia, 11 in New Zealand and seven in the UK. Westfield Holdings shares on the ASX fell as low as $A16.01 on Wednesday but recovered to close down 5.1% at $16.90 on Wednesday.

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