Westfield Group (ASX: WDC) is one of the world's largest and most dominant shopping centre operators with over 100 investment interests spread throughout Australia, New Zealand, the UK and the US.
For years, there has been talk of the company's prospects of expanding into emerging markets such as Brazil or Italy, but few comments made regarding the possibility of expanding into China or various other Asian markets. After all, China is the world's fastest growing economy and boasts a population of over 1.3 billion people, so what better opportunity is the company searching for?
According to Westfield's joint CEO, Peter Lowy, now just isn't the right time to be "running to new markets".
Understandably, the company is cautious regarding its foreign operations – particularly given that it suffered a major setback in its attempt to break into the Brazilian market when it ended a less than two-year-old joint venture with Almeida Junior Shopping Centres due to differences in the groups' strategies.
Meanwhile, it has enough problems in the markets that it is already operating in. For instance, the rapid rise of internet retailing is threatening the very existence of traditional brick-and-mortar retailing, business and consumer confidence around the globe remains low and various developed nations are undergoing fragile recoveries.
When asked by The Wall Street Journal whether the company was considering expanding into new markets, Lowy said, "Before you run to other markets all the time you need to bed yourself down where you are. And when you look at the size of the business we have, when you look at some of the developments that we're doing, we're not exactly in a position to be running to new markets. We have to get ourselves set in Brazil."
He further added that the issue with China is "there are lots of developers and there are lots of opportunities. As a company, we're pretty full at the moment with our development book."
Although various other retailers and property groups are eager to make their names known in the promising Asian markets, Westfield has established that it is more important to strengthen its position in its existing markets and continue to strive for assets in Brazil that it can manage on its own.
Westfield Group, along with its affiliate Westfield Retail Trust (ASX: WRT), are focused on strengthening their balance sheets by divesting from non-core assets and using the proceeds to develop their most profitable stores. It is pleasing to see the group's level of dedication to solidifying its position in its existing markets and, at today's price, it is a more attractive prospect than others in the sector such as GPT Group (ASX: GPT) or Federation Centres (ASX: FDC).