Westfield trust may well be of interest WESTFIELD Retail Trust is Australia's largest domestic retail-focused real estate investment trust (REIT), with a substantial portfolio of assets in Australia and New Zealand. The trust's strategy is to maximise the income and capital returns from its investment portfolio and, primarily in partnership with Westfield Group, create further value through redevelopments, acquisitions and capital management initiatives. On June 30, WRT had 47 centres, encompassing 12,295 shops and a gross lettable area of 3.7 million square metres. Total assets of the shopping centre portfolio exceed $13.5 billion. Despite the well-publicised difficulties facing retail, WRT's portfolio remains solid. More than 99 per cent of the portfolio is leased while the weighted average lease term is a healthy 6.9 years. Anchor tenants have an average weighted lease term of 9.8 years. Importantly, the financials of the trust are robust. WRT has a low level of gearing and exhibits stable cashflows. The gearing ratio of WRT is 22 per cent, a relatively low level given the trust's heavy weighting to good-quality income-producing assets. It would appear that capital management is a focus for the trust, which is continuing its on-market buyback. WRT recently announced that its "on-market securities buyback program, launched in October 2012, will be extended by a further $100 million." This, coupled with $184m already bought back at a discount to NTA, builds further per share value over time. WRT recently declared an interim distribution of 9.9c per security. At current market prices, WRT is trading at a substantial discount to its net tangible assets (NTA) backing of $3.47 per unit and offers a sound distribution yield approaching 7 per cent. Looking ahead, management remains optimistic despite the challenging retail environment. MD Domenic Panaccio said: "Together with the value generated by our redevelopment program and capital management initiatives, the trust is well positioned to create long-term value for security holders." With a portfolio of high-quality assets, which in turn provide a steady stream of recurring income, WRT may well be of interest to income-focused investors. Adrian Ezquerro is an analyst at Clime Investment Management (ASX: CIW) www.clime.com.au.