Westfield Retail Trust (WRT.AX) announced yesterday that it plans to expand its Garden City shopping centre in Brisbane.
The complex, which is already one of the busiest and strongest performing of Westfield’s Australian centres, is going to expand another 40,000 square meters. Evenly owned by the Trust and Westfield Group (WDC.AX), the new centre has a forecasted yield in the range of 6.75%-7.25%. Construction is expected to be completed in the fourth quarter of 2014.
Recently, Westfield Group has been enjoying healthy results and has executed share buy backs over the past month. Despite a 43.1% decrease in revenue for year 2013, in its most recent full year report the company stated NPAT was up 18.3% to $1.72b.
Westfield Group Co-CEOs, Peter Lowy and Steven Lowy AM said: “This has been a significant year for the Group as we continued to position WDC to generate greater shareholder value.” Shareholders certainly responded to the optimism of management together with good results and consequently have driven the share price up 25.8% this past 12 months.
Many investors consider Westfield as a strong defensive stock, with the group currently paying a dividend of 60.3 cents per share or 4.5%. Together with international operations in the United States, United Kingdom, New Zealand and Brazil, the diversified business model offers both security and growth prospects. The group boasts 23,000 retail outlets and $62.9b under management worldwide.
If you are considering a less volatile and trusted Australian stock, Westfield could be the right one for your portfolio. Just as BHP Billiton Limited (BHP.AX) and other resource companies are facing the “resources downturn”, fortune tellers may also argue that the Internet will ruin all retail outlets. However, although the expanding online shopping realm has pushed many smaller retail chains into financial ruin, this behemoth seems somewhat immune to short term volatility and could be a genuine long term investment in the industry.
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The Motley Fool’s purpose is to help the world invest, better. Click here now for your free subscription to Take Stock, The Motley Fool’s free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson. Motley Fool contributor Owen Raszkiewicz does not own shares in any of the mentioned companies.