On a day in which the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) is storming higher, one share in particular is missing out on today's rally.
That share is international shopping centre operator Westfield Corp Ltd (ASX: WFD). This morning Westfield's shares dropped by almost 3% following a sell off in bond proxies and the release of a mixed third-quarter update.
As of the last quarter, Westfield reported that specialty retail sales grew 3.3% in its flagship shopping centres over the last 12 months, with regional centres seeing sales fall 0.9% over the period.
Although its flagship centres have performed reasonably well over the last 12 months, worryingly sales have begun to decelerate in the most recent quarter. In the last quarter flagship centre sales increased just 2.2%, dropping below the rolling 12-month rate of 3.3%.
The performance of its flagship centres is incredibly important as they account for 81% of Westfield's portfolio. Any drop in sales could potentially point to weakness in bricks-and-mortar retail shopping, ultimately leading to lower occupancy levels and falling rents.
Occupancy levels at its flagship centres are at 95.8% and the average specialty store rent per square foot increased by 4.8% to $106.46 over the last 12 months.
As two-thirds of its revenue derive from the US market, a thriving US economy would do wonders for the company. If Donald Trump can bring about an economic boom that encourages consumer spending then Westfield could be a company that benefits greatly.
At 15x full year earnings it may be cheaper than its local spin off Scentre Group (ASX:SCG). But in my opinion there are far better investments in the retail space such as Premier Investments Limited (ASX: PMV) and Bapcor Ltd (ASX: BAP).
