Scentre Group, the Australia and New Zealand-focused mall operator spun off from Westfield Group and its managed trust, is considering residential development and buying existing malls to boost returns.
“Whether it’s developing an office on top of Westfield Sydney or residential as part of a redevelopment, that’s something we would look at,” Chief Executive Officer Peter Allen said today in a telephone interview. “There are certain areas we’re not represented in, a number of the growth corridors in Australia and New Zealand, so there are opportunities for acquisition.”
Westfield co-founder Frank Lowy spun off Scentre, now Australia’s biggest property trust, to offer a clear choice for investors wanting to focus on Australasian malls. Those seeking only overseas exposure were given that option in the new Westfield Corp.
Scentre today said funds from operations are forecast to be 10.88 Australian cents a share in the six months to Dec. 31, and it expects to pay a dividend of 10.2 cents.
Scentre shares fell 2.3 percent to A$3.47 at the close of trading in Sydney, paring gains to 13 percent since the close on the first day of trading on June 25. The benchmark S&P/ASX 200 Index closed 0.1 percent higher.
The company is reviewing its assets and will consider selling some properties that don’t offer “sufficient long-term returns,” Allen said today. It may take on joint venture partners to fund developments, he said.
Possible sales include some office buildings Westfield has developed as part of shopping center projects, such as 85 Castlereagh Street, which houses its own headquarters and the Sydney offices of JPMorgan Chase & Co., he said.
“Certainly we’ve seen positive views of office investments in Sydney, we’ve seen some recent sales which have been above valuation,” Allen said. “That will certainly be put into the mix when we review how we’re going to fund the business going forward.”
Westfield Corp. reports first-half results tomorrow. Lowy is Australia’s fourth-richest person with a net worth of $5.5 billion, according to the Bloomberg Billionaires Index.