'Our retail space is evolving to meet the demands of both retailers and shoppers, and at the same time new retail channels are opening up through the application of digital technology and the emergence of new retail formats.'
It is with great pleasure that I present to you the inaugural Shareholder Review for Scentre Group – the new owner and operator of Westfield shopping centres in Australia and New Zealand.
The creation of Scentre Group through the merger of the former Westfield Group’s Australian and New Zealand shopping centres with the Westfield Retail Trust has created a new entity that is the pre-eminent retail property group in these markets.
Scentre Group owns interests in 47 Westfield centres, including 14 of Australia’s top 20 performing centres, and has assets under management of $40.9 billion.
The rationale for the merger was to provide investors with a greatly simplified structure which focusses exclusively on the Australian and New Zealand markets, without the foreign market and currency risk associated with Westfield Group.
By February this year the combined market capitalisation of Westfield Corporation and Scentre Group was over A$41 billion, representing A$12 billion of value creation for the securityholders who participated in the restructure.
Scentre Group’s strategy of owning interests in the highest quality regional shopping centres in Australia and New Zealand maximises income and capital growth through intensive management, redevelopments which increase the value of our assets, and potential acquisitions.
The Group has a development pipeline in excess of $3 billion of future projects and $1.3 billion of current projects. Two major projects have already opened since the establishment of Scentre Group: Westfield Garden City in Brisbane and the third stage of Westfield Miranda in Sydney.
These projects epitomise the Scentre Group approach of continual improvement of already high quality assets, something which has been the hallmark of our shopping centres since I co-founded Westfield 55 years ago. Over this time, I have seen the shopping centre industry in Australia and New Zealand flourish and become home to one of the world’s most mature retail property markets. What was then a relatively small country in terms of population, geographically distant from well-established retail markets, has developed into a dynamic and resilient marketplace for retailers.
There is now a vibrant intersection between domestic and international retailers with each driving not only the products we shop for, but how we shop. Our retail space is evolving to meet the demands of both retailers and shoppers, and at the same time new retail channels are opening up through the application of digital technology and the emergence of new retail formats.
One thing that has remained constant throughout the history of Westfield shopping centres is the central role they play in the communities they serve. New technologies will always be useful in helping us better connect the retailer and the shopper, but it is the human interaction and the community spirit of our centres that will always be paramount.
I am proud that the Scentre Group portfolio of shopping centres will continue to operate under the Westfield brand that is instantly recognisable to retailers and shoppers in Australia and New Zealand. It is symbolic of the fact that while Scentre Group is a new company, it begins its life with the benefit of more than five decades of operational excellence and experience and is steeped in the Westfield tradition.
I would like to take this opportunity to acknowledge the role of the board, senior management and all staff during this early establishment phase of what is an exciting new company. Scentre Group has made a terrific start, and I look forward to more success in what promises to be a busy and productive year ahead.