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C+CT

Redevelopments helped drive Westfield NOI growth in 2017

February 22, 2018

Mall landlord Westfield spent 2017 redeveloping several of its flagship properties and fueling net operating income growth while awaiting completion of a planned merger with Paris-based mall operator Unibail-Rodamco.

Flagship center The Village at Westfield Topanga, in Canoga Park, Calif.

Comparable NOI growth for the portfolio was up by 2.2 per cent for 2017, excluding termination income. For 2018 Westfield is forecasting comparable NOI growth of between 2.5 and 3 per cent. “This reflects the transformation of our portfolio currently taking place in an evolving retail environment where approximately 50 per cent of our specialty stores have turned over in the past five years,” said Co-CEO Steven Lowy.

L Brands, Lululemon, Target, Tiffany and Urban Outfitters were among the top-performing tenants in the portfolio last year, Lowy says. “We are heavily focused on remerchandising and investing in upgrading and enhancing our retail mix," he said, "with the introduction of many new concepts and brands, replacing underperforming and outdated retailer formats."

Average rents for the total portfolio were up by 4.7 per cent, to $94 (about €75) per square foot, with the flagship portfolio up by 4.6 per cent, to $117 per square foot. Meanwhile, the year's growth for new leases over expiring rents of comparable space was 14.8 per cent, with the flagship portfolio at 17.5 per cent. 

When the Westfield merger with Unibail-Rodamco is completed, the combined portfolio will comprise 104 assets at a total value of about $73 billion.

By Brannon Boswell

Executive Editor, Commerce + Communities Today

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