CEO Outlook 2025: Michelle Higgins, Region Group

unities for sustainable growth? As we enter 2025, Region Group’s portfolio is strategically positioned for growth, taking advantage of sustained population growth and historically low unemployment rates, and strong fundamentals in the convenience-based retail sector. Limited new floor space supply constraints, steady income growth, and the stabilising of capitalisation rates provides a favourable backdrop for long-term value creation. These market dynamics reinforce the strength of our investment approach and directly supports our targeted value creation programs, ReGen and ReVive focused on asset optimisation, sustainability and retail experience enhancements. Our strong fundamentals Despite near-term cost of living pressures, our portfolio has shown remarkable resilience. Specialty productivity in our non-discretionary weighted portfolio increased to $10,778m2 at 31 December 2024. The strength of the convenience-based retail sector has supported annualised sales growth across the Region portfolio of 5.8% since June 2019. Fundamental to this is our partnership with our anchor tenants, which has supported strong visitation and overall productivity of our portfolio. Our sustainable specialty occupancy cost also supports long-term specialty rental growth into the future. Our convenience-based portfolio includes more than 120 anchor tenants, who deliver almost half of the total rental profile across the Group. We have been committed to partnering with our anchor tenants as consumer trends evolve and now have 75 direct to boot and e-commerce facilities. Region’s focus on supporting retailer productivity and their rental cost base has delivered sustained leasing spread growth during the past five years. This focus has been critical during a period where capitalisation rates were increasing. Now, we see that conditions are ideal for retail reinvestment, unlocking potential across our portfolio. Our view is supported by the undersupply of retail floorspace available to service our growing population from immigration coupled with the resilient Australian consumer. Our customer focus At Region, we believe that elevating essentials will support value creation. Our ambition in supporting better communities through life’s essentials is demonstrated through our commitment to optimising the customer experience across our Region portfolio – delivered through two programs across strategically selected centres. Fundamental to unlocking these programs has been the deepening of our understanding of our customer and the communities in which we operate in. Delacombe Town Centre, VIC Our repositioning program, ReGen, unlocks our opportunity to elevate essentials across high growth properties and includes: Major internal design and reconfiguration, leasing remix, solar and embedded network installation, introduction of play, enhanced community engagement initiatives and ambience upgrades supporting our vision to be the first choice for fast and easy essentials at a place nearby. $35 million investment is currently underway across three centres: Lavington Square (NSW), Pakenham Marketplace (VIC) and Miami One (QLD) with completion forecast for mid-2025 A further $48 million investment is committed across an additional two centres: Kwinana Marketplace (WA) and Lilydale Marketplace (VIC) with completion forecast for late-2026. Our ReVive program elevates essentials for our customers through minor ambience upgrades such as signage, car park resurfacing and line marking, shade sail replacements, painting and landscaping. A $15 million investment is currently underway across 12 centres with completion forecast for late-2025. Long term value creation During the past 12 months, we have been active in progressing our development pipeline. We have actively pursued opportunities in growing communities with above average population growth. Delacombe Town Centre (VIC) Stage 2 is now trading, combining large format retail with a state-of-the-art Woolworths local distribution centre. More than 10,000m2 in incremental GLA was added to the already dominant Town Centre. Other active planning opportunities include expansions for North Orange (NSW), Greenbank (QLD) and Marketown (NSW). Our disciplined approach to investment also extends to our capital recycling program. Since May 2023, $196.8 million of disposals were completed at an average passing yield of 5.3%. This capital was deployed into accretive opportunities such as the acquisition of Cooleman Court (ACT) and Kallo Town Centre (VIC) at an average yield of 6.6%. Surplus proceeds were also reinvested into the portfolio repositioning, development and sustainability activities. Expanding our funds management platform Region’s proven track record as the largest owner of convenience-based centres has been instrumental in expanding our funds management platform. Leveraging our sector expertise, we successfully partnered with institutional capital to establish Metro Fund 2, further strengthening our position in the market. This addition brings our total funds under management to $680.4 million, with a strategic focus on metropolitan locations across Australia, reinforcing our commitment to long-term growth and value creation. Little Hands Wise Hearts initiative, Marketown NSW Executing on our sustainability strategy Operating sustainability is fundamental to executing our core strategy and a key strategic pillar of our long-term growth. Region has made significant progress in reducing our environmental footprint, with 30 solar PV installations completed and another 30 sites in detailed design, advancing our goal of reaching 25MW of installed solar capacity by FY26. Additionally, we outlined our Net Zero Scope 1 and Scope 2 greenhouse gas (GHG) emissions strategy beyond FY26, reaffirming our commitment to achieve Net Zero Scope 1 and 2 GHG emissions by FY30. To further enhance our sustainability efforts, we have undertaken a comprehensive assessment of our portfolio’s overall carbon footprint, including Scope 3 GHG emissions, providing a clearer picture of our broader environmental impact. However, sustainability is about more than just environmental responsibility – it’s about creating meaningful impact in the communities we serve. At the heart of our strategy is our commitment to supporting the daily lives of our communities. We’ve embraced this not only through our retail offerings but by engaging at a grassroots level and beyond. As a Group, we are deeply committed to social responsibility, fostering the wellbeing of our Region people, partners, tenants, customers and the broader communities in which we operate. We have taken proactive steps to enhance employee wellbeing, promote diversity and inclusion, and support social initiatives. Through community programs, local initiatives and our partnership with The Smith Family, we continue to make a tangible difference, helping our communities thrive and grow. Better together Our team are the foundation of our success. Through strategic partnerships and well-structured frameworks, we continue to elevate essentials through driving operational excellence. We appreciate Knight Frank Australia’s ongoing collaboration in this journey. Above all, our team, with their expertise and commitment, remain our greatest asset in delivering our strategy. These teams enable the execution of local initiatives that address the unique needs of each community we serve, developing deeper community connections with cause. Programs such as the Shopping Centre Council of Australia’s award-winning intergenerational workshops Little Hands Wise Hearts, cultural celebration calendars, and events like the Ipswich Toy Run, are designed to not only foster inclusivity, connection, and a sense of belonging, but also positively respond to macro social and environmental challenges faced by most communities across Australia. These efforts have positioned us as more than just a provider of retail space; we are a central part of the communities we serve, and we know our success is directly tied to that of our communities. A promising year ahead As we look toward 2025, we are excited by the opportunities to create value, support our communities and drive sustainable growth. By leveraging on our core strengths and embracing innovation, we are well-positioned to navigate future challenges in order to deliver meaningful outcomes for all our stakeholders. SCN’s Premium members can view the full CEO Outlook feature in the latest edition of SCN magazine.