News

Westfield to raise £1.28bn for ‘extensive’ expansion

News

Nathan Cross

12 June 2007

Investment/finance, Retail

Australian shopping centre owner Westfield says it will raise AUS$3bn (£1.28bn) to finance an “extensive” development programme and future opportunities.

The company will raise the funds through an underwritten issue of new securities, representing just less than 8% of its current market capitalisation of about AUS$38bn (£16bn).

Group managing directors Peter and Steven Lowy said: “This equity raising strengthens the Group’s capacity for generating superior long term earnings and capital growth by developing our centres to generate returns well above the Group’s cost of capital.”

Westfield has interests in 121 shopping centres across Australia, the United States, the United Kingdom and New Zealand with a gross value of more than AUS$60bn (£25bn) and in excess of 22,000 retail outlets.

It currently has 19 projects under construction globally, with an estimated total cost of some AUS$7.6bn (£3.24bn).

In addition to these projects, the Group expects to commence more than AUS$10bn (£4.26bn) of new projects in Australia, New Zealand, the US and the UK over the next three years.

These projects are expected to generate long-term ungeared internal rates of return on invested capital in the range of 12% – 15%.

“The Group’s development strategy involves the creation of major landmark destinations on an international scale such as the recently completed projects at Bondi Junction (Sydney) in Australia, Century City and Topanga (Los Angeles), and San Francisco in the United States,” Mr Lowy said.

“Our current landmark projects, which include Westfield London in the United Kingdom and Doncaster (Melbourne) in Australia, and future projects such as Sydney City in Australia, Valley Fair (San Jose), Montgomery (Maryland) and UTC (San Diego) in the United States, and Stratford (London) in the United Kingdom, continue this strategy.”

The new shares will be issued at an offer price of AUS$19.50 (£8.32) each. Eligible shareholders will be entitled to subscribe for two securities for every 23 held at 7pm, 18 June 2007.

Australian shopping centre owner Westfield says it will raise AUS$3bn (£1.28bn) to finance an “extensive” development programme and future opportunities. The company will raise the funds through an underwritten issue of new securities, representing just less than 8% of its current market capitalisation of about AUS$38bn (£16bn). Group managing directors Peter and Steven Lowy said: “This equity raising strengthens the Group’s capacity for generating superior long term earnings and capital growth by developing our centres to generate returns well above the Group’s cost of capital.” Westfield has interests in 121 shopping centres across Australia, the United States, the United Kingdom and New Zealand with a gross value of more than AUS$60bn (£25bn) and in excess of 22,000 retail outlets. It currently has 19 projects under construction globally, with an estimated total cost of some AUS$7.6bn (£3.24bn). In addition to these projects, the Group expects to commence more than AUS$10bn (£4.26bn) of new projects in Australia, New Zealand, the US and the UK over the next three years. These projects are expected to generate long-term ungeared internal rates of return on invested capital in the range of 12% – 15%. “The Group’s development strategy involves the creation of major landmark destinations on an international scale such as the recently completed projects at Bondi Junction (Sydney) in Australia, Century City and Topanga (Los Angeles), and San Francisco in the United States,” Mr Lowy said. “Our current landmark projects, which include Westfield London in the United Kingdom and Doncaster (Melbourne) in Australia, and future projects such as Sydney City in Australia, Valley Fair (San Jose), Montgomery (Maryland) and UTC (San Diego) in the United States, and Stratford (London) in the United Kingdom, continue this strategy.” The new shares will be issued at an offer price of AUS$19.50 (£8.32) each. Eligible shareholders will be entitled to subscribe for two securities for every 23 held at 7pm, 18 June 2007.