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Westfield 2007 Profit Up, Sees 6% EPS Growth in 2008

Westfield Group, the world's top shopping mall owner, reported an 11.6 percent rise in net operating profit for 2007, slightly below market forecasts, driven by rental growth at its Australian malls.

Westfield, which has interests in 118 shopping centers in Australia, New Zealand, the United States and Britain, said it expected earnings per share growth in 2008 to match the 6 percent growth achieved last year, excluding currency shifts, and expected to pay a unchanged distribution of 106.5 cents in 2008.

"I don't see anything in there in the initial numbers that would disappoint the market," said ING Investment Management portfolio manager Justin Blaess.

Net operating income rose to A$1.786 billion (US$1.67 billion) in calendar 2007 from A$1.651 billion a year earlier. Analysts were expecting a net operating profit of A$1.882 billion, according to Reuters Estimates.

Net profit fell 38 percent to A$3.44 billion as property revaluations in 2007 added up to much less than the year before.

It said occupancy at its U.S. malls had risen to 94.1 percent at the end of December from 93.5 percent six months earlier, while its malls in Australia and New Zealand continued to be nearly fully occupied.

Net operating income growth from malls open for more than a year rose 5.6 percent in Australia and New Zealand, 2.7 percent in the United States, and 4.0 percent in Britain.

Income growth from its malls in the United States, where Simon Property Group is its biggest rival, has slowed from 3 percent a year earlier.

After raising nearly A$9 billion last year, partly through a share and bond sale, Westfield cashed itself up before the credit crunch set in to help fund more than A$10 billion worth of mall developments it plans to start over the next three years.

Development projects are its most profitable business, with yields of around 9 to 10 percent.

Last month Westfield signed a letter of intent to team up with the Port Authority of New York and New Jersey to lease and manage stores at the redeveloped World Trade Center and to invest up to $625 million in developing the stores.

Westfield first bought a stake in the World Trade Center in 2001, two months before it was destroyed in the 9/11 attacks.

Westfield's shares have held up better than the listed property trust index in the wake of smaller rival Centro Properties Group's debt troubles, down 16 percent compared with an 18 percent fall for the index so far this year.