Westfield sticks with dividend guidance

The world’s biggest shopping centre owner, Westfield Group, has confirmed it will pay a distribution of 64 cents per security.

Chairman Frank Lowy told security-holders at the company’s annual general meeting in Sydney that the distribution represented a payout level of between 70 per cent and 75 per cent of operational earnings.

‘‘In previous years we have paid out 100 per cent of operational earnings and the decision to reduce the level of the group’s distribution was not taken lightly,’’ Mr Lowy said today. ‘‘However, the board decided and announced last year that a prudent way of funding our extensive development program, at least in part, was to retain part of our earnings each year for that purpose.’’

Mr Lowy told the meeting that it was beginning to see more positive signs in the economies it operates in and the results from it first quarter of operations this year confirmed this better outlook.

Westfield said it continues to see strong results from the Australian portfolio and is now seeing improvement in retail sales performance in the more difficult markets of the United States and United Kingdom.

The company recently announced it was restarting development after putting new development on hold last year.

The group would expand its development programs to $US1 billion ($1.22 billion) worth of new project in 2010. This will involve some $US800 million of new projects in Australia this year, and a number of smaller projects in the US valued at $US200 million.

He said the extra money from distribution will help fund the group’s expansion plans.

‘‘Development and the redevelopment of our centres has been the core of our business philosophy for many years,’’ Mr Lowy said. ‘‘It protects and enhances our revenue by keeping our centres fresh and relevant and generates growth for you, as members.

‘‘Retaining part of our earnings, whilst continuing to pay a significant and stable return each year, is, we believe, in your best interests as members of the group.’’