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westfield group down 38 per on shopping mall

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    Feb. 27 (Bloomberg) -- Westfield Group, the world's largest shopping mall owner by market value, said full-year profit declined 38 percent as property values increased at a lower rate amid concerns about slowing retail sales in the U.S. and U.K.

    Net income fell to A$3.4 billion ($3.2 billion) in 2007, from A$5.6 billion a year earlier, the Sydney-based company said in a statement today. The value of Westfield's properties increased by A$1.7 billion, 59 percent less than last year.

    Retail sales in the U.S., which brings in about 47 percent of Westfield's revenue, have weakened as the U.S. economy slows in the wake of the subprime mortgage crisis. Westfield hasn't seen any sign that vacancies will increase at its U.S. malls, Managing Director Steven Lowy said today.

    ``We haven't had a greater level of store closings or abandonments or bankruptcies than last year, and last year was actually a pretty good year from that perspective,'' Lowy said during a conference call with analysts.

    Operating profit, which excludes property valuation gains, rose 12 percent to A$1.79 billion, or 96.12 cents a share, Westfield said. The company expects similar growth this, when adjusted for fluctuations in exchange rates.

    Westfield, controlled by Australia's second-richest man Frank Lowy, is raising rents and accelerating new developments to tap demand for retail space. The company has almost A$16 billion of projects planned or under construction, including its 1.6 billion pound ($3.2 billion) share in the development of White City, London's biggest shopping mall.

    Westfield shares declined 32 cents, or 1.8 percent, to A$17.35 at 11:33 a.m. in Sydney. The company will pay a total dividend for the year of A$1.065.

    The net income beat the median estimate of A$3.3 billion in a survey of four analysts compiled by Bloomberg.

    Westfield manages more than A$63 billion of retail centers globally and has malls in 13 U.S. states including California, Florida and Nebraska.

    To contact the reporter on this story: Simeon Bennett in Sydney at [email protected]

    Last Updated: February 26, 2008 19:35 EST
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