Lessons For American Mall Builders

"[Frank Lowy's] big idea came much later, once he understood that the shopping-centre business really consists of two different types of income stream. One is rental income from the ownership of properties—not very risky, and so ideal for investors such as pensioners. The other comes from the construction and management of the centres. This is more volatile, and so attracts a different kind of investor. Financial theory suggests that offering these two income streams separately to the capital markets should lower the overall cost of financing the shopping centres. That cost advantage, in a nutshell, is what now helps Westfield to outgun its rivals."