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Australia’s Westfield ups stake in new Milan mall as H1 income rises

Westfield Corp said Wednesday it was making “significant progress” with its $11.6bn (US) investment in global projects as the Australia-based mall giant reported a 5.3% increase in H1 operating income. Westfield said it has increased the share of its €1.4bn ($1.84bn), 1.8m sq ft Milan mall development to 75% from 50%, with Galeries Lafayette acting as the anchor tenant. It also said it will seek other opportunities in mainland Europe as it tries to expand outside its traditional US and UK markets. In addition, the company said it is making “good progress” on its $1.4bn World Trade Centre project in New York which is now 70% leased and expected to open late next year.

The firm, which assumed Westfield Group’s international operations after its Australian and New Zealand assets were folded into a new entity in July, said the results for the six months to June 30 were “in line with expectations”.

“The operating performance of our pre-eminent portfolio of 40 shopping centres in the United States and United Kingdom remains strong, and in line with expectations,” Westfield’s co-chief executives Peter and Steven Lowy said in a statement.

Its Australian and New Zealand businesses, including 47 malls, merged with Westfield Retail Trust to form a new entity named Scentre.

Scentre on Tuesday reported property net operating income growth in its Australasian portfolio of 2.3% for the six months to June 30.

Westfield Corp, meanwhile has interests in 44 malls in the US, UK and Europe, with assets under management of $27.7bn.

“Our strategy is to continue the focus on creating and operating iconic assets in major markets that deliver great experiences for consumers and retailers,” the statement said.

· Construction of its Milan mall, in a joint venture with local developer Grupo Stilo, will start in either 2015 or 2016 and will take roughly three years, Westfield said in a filing Wednesday. Peter Lowy said Westfield Milan could have the same sales capacity as Westfield London, which in 2013 generated annual retail sales of £982m ($1.63bn). “It’s nice that Europe is stabilising, but it’s not really predicated on that,” Lowy said. “The fundamentals in that part of the world are incredibly strong, driven by the wealth of the market and the lack of supply in the market.”

· The splitting up of Westfield into Westfield Corp and Scentre Group has delivered shareholders an A$4.5bn gain in less than two months. “As of today, with the new entities’ combined market capitalisation of approximately A$35bn, the restructure has created A$4.5bn of value for the shareholders of the former Westfield Group and Westfield Retail Trust,” Lowy also said Wednesday.

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