Shopping centre giant Westfield would have to be the most successful property investment company ever to exist in Australia. It offers plenty of ideas that can be imitated by the everyday Aussie investor.
In fact, it is difficult to envision a more compelling case study that demonstrates how ordinary Australians can take advantage of smart, strategic property investments.
Most of us would have walked through a Westfield Shopping Centre at some point, but for those who are not familiar with the financial arm of Westfield let me provide you with a short summary.
The business was established in 1960 with a single row of shops in the Sydney suburb of Blacktown. It was sold in 2017 for a whopping $33 billion.
Essentially, an investment of $1,000 in 1960 would have been worth $440 million upon completion of the 2017 sale, assuming all dividends were reinvested.
That works out to be a compound rate of return of 25.6 per cent every year for 57 years!
To put that into perspective, Warren Buffett, who is universally regarded as the world’s most successful investor, has achieved a compound rate of return of 19.8 per cent since 1965.
While Westfield owes its success to its ability to attract quality retail tenants, its success can just as equally be attributed to the way it has used its land over time.
Brisbane’s Westfield Indooroopilly (since on-sold and today known as Indooroopilly Shopping Centre) opened its doors in 1970, the single-level centre taking up residence on a 70,000 square metre plot of land with 38 stores and car parking. The building itself sat on 40 per cent of the total land area.
Fast forward to today, and the Indooroopilly centre has 300 stores across four storeys. The building itself sits on 95 per cent of the total land area. The retail floor area is nearly double the land area at 117,000 square metres. Further, the car park is underground and on top of the roof (and there are four times as many car parks in 2025).
The annual rent would be circa $100 million. And remember, the centre cost around $7.5 million to buy and build 55 years ago.
What I’m getting at is that every day Australians can successfully mimic the Westfield model.
As many as 70 per cent of Australians live in a house on a block of land these days. As our population grows from 26 million to 40 million between now and 2050, that will need to change. Australians will inevitably live in denser housing – just as every other developed country with a larger population has done.
Think about a 400 square metre block of land. Today, that might be a single dwelling. But in the future, that same block could accommodate three or four tenancies – a smaller-scale version of what Westfield achieved when it expanded from 38 stores to 300 some six decades later.
If you bought a property in 1990, you could create a duplex, triplex, or even a three-storey walk-up on your 800 square metre block (the average size at the time).
The blueprint for success has been established – all you need is bit of discipline, smart planning, and the patience to implement it over time.
By following this proven strategy, we can build our mini versions of the Westfield land empire and bag ourselves some capital growth.
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