Scentre Group posts growth in funds from operations as footfall rises

4 months ago 2 min read

Sean Cao

Scentre Group has reported an increase in funds from operations (FFO) amid higher visitations to its malls during the fiscal first half.

The group, which operates 42 Westfield shopping centres in Australia and New Zealand, saw FFO rise 3.2 per cent to $587 million during the six months ended June 30.

Customer visitations have increased to 340 million so far this year, up 3 per cent compared to the same period last year.

Portfolio occupancy was 99.7 per cent as at June 30, representing the highest level since 2017. The group’s business partners reported a 2.9 per cent increase in sales to $13.8 billion.

Statutory profit for the period was $782 million and includes an unrealised property valuation increase of $177 million. Distributions grew 2.5 per cent to $459 million, and total portfolio net operating income was up 3.7 per cent to $1.043 billion.

“Our destinations and 670 hectares of strategic land holdings are key community infrastructure with the potential to deliver additional housing at scale,” said Scentre Group CEO Elliott Rusanow. “We continue to progress our significant and long-term growth opportunities by utilising our prime urban land to create the town centres of the future.”

During the half, the group completed the first stage of the redevelopment at Westfield Bondi in Sydney and opened the first stage of the redevelopment of Westfield Southland in Melbourne.

The group continues to progress its $4 billion pipeline of future retail development opportunities to further enhance the productivity of its portfolio. These future developments have a target yield of 6 per cent to 7 per cent.

For the full year, Scentre reconfirms its FFO target of 22.75 cents per security, representing 4.3 per cent growth. Distribution guidance has been upgraded to increase by 3 per cent to 17.72 cents per security.

“Our strategy to attract more people to our Westfield destinations and to unlock long-term growth opportunities from our strategic land holdings is expected to continue to deliver ongoing growth in earnings and distributions,” Rusanow added.