Westfield Group, Australia-based property giant, is planning to invest more in retail properties abroad as local sales look gloomy in the country. The firm has mainly targeted the U.K. and the U.S. as its prime investment locations as the commercial real estate sector is reviving in the region.
Westfield has already invested around 55 percent of its intended investments in projects in the countries. However, it has now decided to notch it up by 5 percent in the regions. The Australian retail real estate slow down has forced the company to look for opportunities offshores. Retail sales in Australia fell consecutively for three months marking a long 13-year slump in the sector, reports Washington Post.
"You'll see a bigger increase coming out of the other markets as Australian developments slow down a little bit. What we're doing in Europe is trying to see if we can find other sites that have the characteristics of Milan, where the customer is underserved but has large amounts of disposable income, and the real estate is in the right place." Peter Lowy, CEO of Westfield, said to Bloomberg in a telephone interview.
Westfield recently announced its full year profit results of 2012. The company stated that it had recorded a profit of around $1.7 billion, which is around 18.3 percent higher than the figures of 2011. Funds from Operations (FFO) were up 0.3 percent, amounting to 1.47 billion.
In the report, Westfield also analyzed that retail sales in New Zealand and Australia were forecasted to be around 1.5 percent to 2 percent. However, the actual sales rates were lower than anticipated. Co-CEO, Steven Lowy asserted that the rates would remain low in 2013 but would pick up over the next 12 months. Experts predict the Australian consumer sentiment to improve over the year as well.
"Retail has been cyclically low and at some time in the next 18 months we expect to see cyclical conditions improve and we've already seen a number of interest rate cuts which will hopefully seep through to the retailers," Julia Lee, analyst at Bell Direct, an online stock brokering firm, said to World News Australia.
Westfield recently signed a $130 million joint venture deal with Hammerson PLC January 2013 to regenerate the Croydon Town Center in London.
