Westfield Corp holds inaugural AGM

After Scentre Group (ASX: SCG) held its AGM last week, yesterday it was Westfield Corp's (ASX: WFD) turn.

Fresh on the heels of Scentre Group's (ASX: SCG) AGM last week, Westfield Corp (ASX: WFD) held its inaugural annual meeting yesterday. It was Frank Lowy’s 55th AGM since co-founding Westfield - by comparison, son Peter has 'only' attended 32. 

Frank's mind appears as active as ever and he deftly swatted aside concerns from shareholders about the cost of the company's co-CEO structure. 

Westfield continues to transform itself into being primarily an owner of flagship shopping centres. Connected to public transport hubs, these centres contain shops, food courts, cinemas and gyms and have become destinations in their own right; a combined 70m people, for example, visited Westfield London and Stratford City last year.

Their popularity means retailers come to Westfield begging to open stores in its centres, even if they’re currently closing stores elsewhere. As well as generating higher rental income, this much reduces the threat from online retailing.

The company’s latest flagship – the US$1.4bn Westfield World Trade Center – is 99% leased and due to open in stages beginning later this calendar year. Located on the southern tip of Manhattan and accessible by 20m people living nearby in New York and New Jersey, it will have a global audience and is likely to be highly successful.

Flagship centres like this now represent 77% of total assets. The company has sold fourteen assets over the past two years, and another six centres worth around US$1.2bn are currently for sale.

Consistent with its strategy, the proceeds will be reinvested into expanding or developing new flagship assets. US$11.4bn of developments – the company’s share is US$6.3bn – will be completed in coming years and will push flagship assets to 85-90% of the total. In response to a shareholder question on which additional global population centres could potentially house a new Westfield, Frank Lowy replied ‘We are looking everywhere’ but nothing is concrete at this stage.

Westfield is also trying to utilise technology to improve results, with an app that allows people to pre-order from any food store in a mall currently in the test phase. Technology that recognises shoppers’ cars is also being tested, with the goal of allowing shoppers to park, visit a centre and then go home, all without having to worry about paying their parking fee.

As if to emphasise the company’s digital efforts, voting was conducted using hand-held devices supplied by Computershare. While being highly accurate, this unfortunately meant it took a lot longer to compile the votes than a simple show of hands.

The Board is still investigating alternative locations for listing the company and hopes to have a proposed recommendation ready by the next year’s AGM. 

Having ditched its slower-growing Australian and New Zealand malls, Westfield appears to have a bright future but is currently too expensive for us. HOLD

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