outside front cover WESTFIELD GROUP ANNUAL REPORT 2009 insideinside front front cover cover Australia 44 centres New Zealand 12 centres United States 55 centres United Kingdom 8 centres CONTENTS Portfolio Overview IFC 50 Years in Review 02 Chairman’s Review 04 Group Managing Directors’ Review 08 Sustainability 16 Human Resources 18 Property Portfolio 20 Board of Directors 24 Financial Report 26 Investor Relations 137 Corporate Directory 140 Commemorative Letter from ASX IBC Westfield Holdings Limited ABN 66 001 671 496 All amounts in Australian dollars unless otherwise specified The Westfield Group – celebrating 50 years The Westfield Group is the world’s largest listed retail property group by equity market capitalisation. The Group has interests in and operates a high quality portfolio of 119 regional shopping centres in Australia, New Zealand, the United States and the United Kingdom, valued at around $59 billion, with almost 24,000 retailers in more than 10 million square metres of retail space. Westfield is a vertically integrated shopping centre group. It manages all aspects of shopping centre development from design and construction through to leasing, management and marketing. The Group creates value through intensive operational management and a strategic development program which aims to continually improve the quality of the portfolio to generate sustainable long term returns for investors. New United United Portfolio Summary Australia Zealand States Kingdom Total Centres 44 12 55 8 119 Retail Outlets 11,747 1,723 9,004 1,270 23,744 Gross Lettable Area (million sqm) 3.6 0.4 5.9 0.6 10.5 Westfield Asset Value (billion) $21.4 NZ$3.0 US$15.1 £2.7 $45.5 Assets Under Management (billion) $29.4 NZ$3.0 US$17.2 £4.8 $59.5 AssetsAssets Under Under Management Management GrossGross Lettable Lettable Area Area UnitedUnited Kingdom Kingdom 14% 14%NewNew Zealand Zealand 4% 4% UnitedUnited Kingdom Kingdom 6% 6%NewNew Zealand Zealand 4% 4% UnitedUnited States States 32% 32% AustraliaAustralia 50% 50% UnitedUnited States States 56% 56% AustraliaAustralia 34% 34% Westfield Group Annual Report 2009 1 50 Years of Shopping Centre Excellence The evolution of the Westfield Group has been a steady progression over the past 50 years. Here are just some of the milestones along the way. 1970 Land was purchased on the edge of Sydney’s CBD, construction got underway and, in 1973 work was completed at Westfield Towers, still the Group’s global headquarters today. 1970 – 76 Growth continued apace in Australia with centres expanding and opening across Sydney, Brisbane and Melbourne including Indooroopilly (Brisbane), Liverpool and Parramatta (Sydney) and Airport West (Melbourne). 1960 Westfield was incorporated in June of 1960, 1977 and shortly afterwards, Saunders and Lowy Westfield entered the United States with the issued a prospectus for its listing on the acquisition of Trumbull, Connecticut. Sydney Stock Exchange. In September Westfield Development 1979 Corporation Ltd was floated with the issue of 300,000 ordinary shares at a price of Capital reorganisation of Westfield Limited five shillings each. with the establishment and listing of Westfield Holdings Limited and Westfield Property Trust to meet changing trends in the capital market. 1961 Westfield Plaza, Blacktown, Sydney The first purpose-built centre, funded by the recent float, opened at Hornsby at a cost of 1959 £345,000. With 22 stores it played a major In July 1959 John Saunders and Frank Lowy role in attracting residents to the area. opened their first shopping centre – Westfield Trumbull, Connecticut, US Westfield Plaza in Blacktown. 1962 – 66 With 12 shops, two department stores and a Three more centres opened in Sydney supermarket, people flocked to see the plaza by 1962, with another three under which newspapers of the day described as development. In 1966 the first branded ‘the most modern American-type combined centre opened at Burwood with the now retail centre’. familiar red Westfield logo. By the end of that year Westfield Plaza was established as the commercial hub of Blacktown’s 100 or so shops, and people 1967 – 69 from all over the area were drawn to the Westfield expanded interstate with the ‘progressive shopping centre’. opening of Toombul in Brisbane followed Westfield Towers, Sydney, AUS by Doncaster in Melbourne in 1969. Westfield Stratford City, UK 2000 In New Zealand the Group acquired the NZ$920 million St Lukes portfolio, branding the centres Westfield. Westfield entered the United Kingdom with the acquisition of a centre in Nottingham followed by 1992 – 93 the establishment of a joint venture interest in nine Major redevelopments were completed at centres in prime town centres and urban locations. Doncaster (Melbourne), Liverpool, and Miranda In Australia, the Group was a major sponsor of the in Sydney, which on completion became Sydney 2000 Olympic Games. Australia’s largest shopping centre. Westside Pavilion, Los Angeles, US 1994 2001 The Group acquired Sydney’s Centrepoint Westfield tripled the amount of space it shopping centre – the home of the iconic Sydney managed in the United States with the Tower and site of the future Westfield Sydney City. 1980 US$1 billion CenterMark transaction, Three centres were acquired in the which saw the Group acquire 19 centres United States in California, Michigan across America. 2002 and Connecticut. Nine shopping centres were acquired in the United 1994 – 96 States in the US$756 million Richard E Jacobs transaction. 1982 Portfolio expansion continued in Australia with Westfield Trust was floated on the Sydney redevelopments, openings and new centres In the same year, the US$2.6 billion Rodamco Stock Exchange as a successor to Westfield coming under the Group’s management. transaction added another 14 malls to the Group’s Property Trust. American portfolio, and consolidated its position as one of the largest retail property groups in the 1996 United States. 1981 – 84 Westfield America Trust was listed on the Redevelopments and new centre openings Australian Stock Exchange enabling Australian 2003 in Melbourne and Brisbane. investors to make direct investments in the US retail property market. Westfield acquired the $1.9 billion AMP Shopping Centre Trust, adding interests in a further nine high 1985 quality shopping centres. In a series of firsts, the Group undertook a 1997 The Australian portfolio grew further with the major redevelopment at Westside Pavilion, Westfield entered New Zealand after assuming strategic acquisition of Sydney Central Plaza in Los Angeles, after demolishing most of the management of the St Lukes portfolio. the city’s CBD. existing centre. The new mall featured the first rooftop carpark in the United States, and was the drawcard that finally brought department 1998 2004 store Nordstrom to Los Angeles. Westfield acquired the US$1.4 billion Westfield Group was born when Westfield TrizecHahn portfolio adding a further Holdings, Westfield Trust and Westfield America 1986 12 properties to the Group’s Californian Trust merged in the company’s most significant portfolio, making it that state’s biggest corporate restructure, creating the world’s Westfield made business headlines when it shopping centre operator. largest retail property group by equity market outbid other parties to successfully acquire Following the US portfolio growth, a capitalisation. three centres in the Macy’s transaction. The significant branding opportunity became acquisition included the powerhouse centre In the same year, an initial interest in White City apparent and every centre owned by Garden State Plaza in Paramus, New Jersey. was acquired in a contested takeover in the United the Group in the United States was Kingdom, paving the way for the future Westfield branded Westfield. London. 1987 As part of that £1.1 billion Chelsfield transaction After 30 years of partnership, John Saunders Westfield America Trust IPO the Group also acquired interests in a number of relinquished his active management in key UK properties, including Stratford City. Westfield, stepping away from the business entirely in 1990. 2004 – 2007 New centres opened at Chatswood and Eastgardens in Sydney. Flagship centres opened at Bondi Junction in Sydney, Century City and San Francisco in California while redevelopments continued throughout the Group’s global portfolio (more than 20 since the decade’s beginning) peaking in 2007 with the completion of five projects in four countries over just four weeks. John Saunders and Frank Lowy Westfield Miranda, Sydney, AUS 2008 The United Kingdom’s largest urban shopping centre opened at Westfield London. The 300- store, £2.1 billion flagship centre attracted more than 23 million visitors in its first year. 2009 The Group made good progress on its iconic projects at Stratford and Sydney City. Chairman’s Review Frank Lowy When Westfield began its life as a public company 50 years ago no-one, least of all its founders, could have predicted it would grow to become one of Australia’s largest and most successful corporations, let alone a world leader in retail property. The company was formed in 1960 to raise funds to build a shopping centre at Hornsby in Sydney. Today, it has interests in a portfolio of 119 centres in four countries with almost 24,000 retailers and assets valued at $59 billion. Each decade of the company’s history reveals a story of growth, in the scale of its operations and in returns for investors. Over the 50 years, shareholders in the entities which today comprise the Westfield Group have contributed equity of $19.9 billion and received back some $15.6 billion in dividends and distributions. With a market capitalisation at 31 December 2009 of around $29 billion, some $25 billion of wealth has been created for Westfield shareholders. Since 1960 original shareholders in the Westfield Development Corporation have received a total return of 27.63% per annum, compared with 10.91% for the All Ordinaries Index over the same period.