Overseas figures to boost Westfield first-quarter sales
The group said the new leases covered only about 2.2 per cent of its portfolio. Nevertheless the declines, according to analysts, reflect the fact that times are tough in the retail sector.
Westfield reaffirmed its full-year forecast of a dividend of 51¢.
In its results for Australia, specialty categories and department stores reported declines ranging from 0.3 per cent to 4.8 per cent over the year ending March 31, and for the three months to the end of March.
The only major areas of positive growth was in food, such as takeaways and supermarkets.
Analysts at Bank of America Merrill Lynch have rated Westfield "neutral", with the stock now trading in line with the firm's $12.12 valuation.
"To become more positive, we would need to see Westfield accelerate its developments via acquisition of other near-term opportunities, as we suspect the market is now fully aware of the current $12 billion pipeline and US recovery," they said. "Continuation of the share buyback would also be a positive."
JPMorgan analyst Rob Stanton said both the Westfield Group and Westfield Retail Trust reported a "steady as she goes update for both groups, with trends at the portfolio level generally continuing from the December quarter".
Mr Stanton said US retail sales continued to grow strongly. "The trends show continued weakness in Australia and New Zealand, which is obviously more of a challenge for Westfield Retail Trust - negative rental reversions increased over the quarter," he said.
UBS analysts said the re-leasing spreads were a negative 5 per cent compared to a negative 0.5 per cent for the same time last year.
Frequently Asked Questions about this Article…
Westfield reported first-quarter sales that were essentially flat in Australia (sales growth of about 0.3% for the quarter). The group said improved performance from its overseas businesses is expected to boost overall first-quarter sales.
Confirmed rents for new specialty-store leases declined by about 5%. The group noted those new leases covered only around 2.2% of its portfolio.
In Australia, specialty categories and department stores reported declines ranging from 0.3% to 4.8% over the year to March 31 and for the three months to the end of March. The main area of positive growth was food-related retail, such as takeaways and supermarkets.
Yes. Westfield reaffirmed its full-year forecast of a dividend of 51 cents per security.
Bank of America Merrill Lynch has rated Westfield 'neutral' and said the stock is trading in line with its $12.12 valuation. The firm said it would be more positive if Westfield accelerated developments through acquisitions and continued its share buyback, noting the market is aware of the current $12 billion pipeline and the US recovery.
JPMorgan analyst Rob Stanton described the update for Westfield Group and Westfield Retail Trust as a 'steady as she goes' result, with portfolio-level trends continuing from the prior quarter. He also noted strong US retail sales but continued weakness in Australia and New Zealand, and an increase in negative rental reversions. UBS analysts highlighted that re-leasing spreads were negative 5% versus negative 0.5% a year earlier.
Analysts pointed to re-leasing spreads of negative 5% (compared with negative 0.5% a year earlier) as a negative indicator for leasing conditions. In the article, analysts treat this as evidence of pressure in the retail leasing market, particularly in Australia and New Zealand.
Analysts cited the US recovery and Westfield's approximately $12 billion development pipeline as important factors. Bank of America Merrill Lynch said accelerating developments through acquisitions and continuing the share buyback would make them more positive, indicating these elements are key to improving investor sentiment.
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