Westfield (WDC) Update

Westfield (WDC) has a Neutral 1 share trading recommendation and a $21.25 price target from Australian stockmarket analyst UBS. WDC have announced the establishment of the UK Wholesale Shopping Centre Fund as foreshadowed at the time of the $3bn equity capital raising last month. The centres include Merry Hill, Belfast, Tunbridge Wells and also Derby once its development is completed (before Oct 2009). Initial yield to be 4.3% after costs with Derby to be sold to the Fund on a yield of 5.0%. 67% of the fund has been taken up by 2 investors with the remaining third to be marketed to a wider group. Accretive but no change to DPU: Initially the establishment of the fund is on average 1.2%pa accretive assuming the proceeds are used to pay down debt (6.5%). If the proceeds are subsequently reinvested in the development pipeline yielding 9%, there is accretion of 2.9% on average. DPU guidance has been maintained at 106.5c. WDC cashing up with $7bn raised in 6months: WDC has now raised $7bn in 6 months, through equity and property sales/funds management initiatives. This will fund half of their 5 year development program (12-15% IRR unlevered) which needs $14bn+ just for WDC's interests. They expect Westfield to continue to sell more mature assets as it works through its current pipeline. Other possible asset sales include US$450m (announced as part of capital raising) and further tranches of Property Notes. The analysts' DCF valuation is $21.25 and NAV is $21.43. Their Price Target is based on a DCF model.

Westfield Limited is listed on the Australian Stock Exchange (ASX) under stock code WDC. You can view their investor website here. WDC was listed on the ASX on 5 July, 2004. The company is involved in shopping centre investment, property management, leasing and marketing, property development, design and construction, funds/asset management. Find out the meaning of the recommendations in this primer. The Westfield Group is the largest retail property group in the world by equity market capitalisation and the eighth largest entity listed on the Australian Stock Exchange. Operating on a global platform, the Westfield Group is an internally managed, vertically integrated shopping centre group, undertaking ownership, development, design, construction, funds and asset management, property management, leasing and marketing employing in excess of 4,400 staff worldwide. The Westfield Group has interests in an investment portfolio of 121 shopping centres valued in excess of A$60.7 billion (US$47.9 billion) located in Australia, the United States, New Zealand and the United Kingdom. Browse for other stockbroker recommendations. You can use Instalment Warrants to trade WDC. Check your charts and good luck with your share trading!