Shopping centre giant Westfield is upbeat about the future of retail sales in Australia despite overriding consumer caution and economic uncertainty abroad.
Westfield chief executive Steven Lowy said the Australian economy was in very sound shape and consumers were being more discerning on what they bought.
“People are not necessarily spending less, but they’re being more cautious where they spend it, how they spend it,” Mr Lowy told a media conference on Wednesday.
“How the consumer feels is very relevant to how they spend.”
Shares in Westfield Group outperformed the market on Wednesday after it announced a $US4.8 billion ($A4.7 billion) joint venture in the US that would deliver it $9 billion to invest in various projects.
The group, which manages 118 shopping centres in five countries, also revealed its full-year net profit for 2011 rose by nearly 40 per cent to $1.532 billion in 2011 from $1.1 billion a year earlier.
Westfield was the third biggest mover on the ASX 200 on Wednesday, with the group’s shares closing 44 cents, or 5.26 per cent, higher at $8.81.
Mr Lowy said Westfield had surprised pundits by recording like-for-like retail sales growth of two per cent in the December, 2011 quarter.
But the result fell short of four to five per cent annual sales growth recorded between 2000 and 2008.
Major macro indicators showed Australia was in very sound shape and retailers would experience sales growth once savings rates flattened.
Westfield’s joint venture with the Canada Pension Plan Investment Board (CPPIB) involves 12 assets in the United States.
The deal would provide it with about $9 billion of capital for use into high yielding investments such as shopping centres in Brazil, Italy, and the rebuilt World Trade Centre in New York.
CommSec market analyst Steven Daghlian said shareholders approved of the joint venture while the profit result was in line with market expectations.
“Sales also came in quite solid,” Mr Daghlian said.
Westfield’s new Sydney shopping centre was now trading at more than $15,000 a square metre which was higher than any Westfield shopping centre in the group.
“This is an example of putting products on the ground that are very relevant to the consumer,” he said.
Westfield said it was focused on investing the group’s capital in highly-productive shopping centres with strong franchise characteristics that are resilient through economic cycles.
The group plans to continue to look for attractive developments and acquisitions around the world and start work on up to $1.5 billion worth of new developments in 2012 and 2013.
While the economic outlook in Europe was uncertain, the US economy appeared to be stable, the group said.
