The Urban Developer
AdvertiseEventsWebinars
Urbanity
Awards
Sign In
Membership
Latest
Menu
Location
Sector
Category
Content
Type
Newsletters
Interested in a Corporate TUD+ Membership? Access premium content, site tours, event discounts and networking opportunities
Interested in a Corporate Membership? Access exclusive member benefits today
Enquire NowEnquire
TheUrbanDeveloper
Follow
About
About Us
Membership
Awards
Events
Webinars
Listings
Partner Lab
Resources
Terms & Conditions
Commenting Policy
Privacy Policy
Republishing Guidelines
Editorial Charter
Complaints Handling Policy
Contact
General Enquiries
Advertise
Contribution Enquiry
Project Submission
Membership Enquiry
Newsletter
Stay up to date and with the latest news, projects, deals and features.
Subscribe
ADVERTISEMENT
SHARE
4
print
Print
RetailTed TabetWed 01 Apr 20

Scentre Group Increases Liquidity by $3.1bn

b2b3b3d1-bbc9-4594-87e1-91bd21d01ba2

In the face of unprecedented economic headwinds, Scentre Group has obtained additional unsecured bank facilities to boost its liquidity by $3.1 billion.

The additional support from its lenders has a two-year duration and provides the retail landlord with further funding flexibility in an uncertain economic environment.

The announcement, made by chief executive Peter Allen, bouyed the group’s shares, which lifted by 12 per cent on Wednesday.

The group currently has $2.5 billion of bonds and bank facilities expiring in December of next year.

The shopping centre giant, which owns 42 Westfield shopping centres in Australia and New Zealand, currently has total assets of $40 billion and assets under management of $56 billion.

More than 65 per cent of the Australian population live within 30 minutes of a Westfield Living Centre, however, strict new coronavirus social distancing rules have forced many retailers under mounting financial pressure.

The company said in a March update that it had pulled its earnings guidance under the basis that the trading environment continues to simply be too uncertain to predict.

Last month, Scentre posted a full-year net profit of $1.18 billion, down 48.4 per cent from $2.28 billion a year ago and a lift in Funds From Operations to $1.34 billion up just 0.4 per cent from its 2018 result.

The company also said it was pushing ahead with a $3 billion development pipeline after divesting $2.1 billion worth of assets over 2019.

Analysts are closely watching the retail sector with the emergence of ecommerce reshaping consumer habits with online shopping increasing by 14 per cent annually for the past three years—four times faster than traditional retail sales growth.

With most of Australia under lockdown, the percentage of shoppers spending more online versus offline is set to increase exponentially, with consumers forced from bricks and mortar stores.

Global ratings agency Moody's weighed in revising the rating outlook to negative from stable.

“The increase in the group’s liquidity demonstrates Scentre’s strong access to capital, and helps reduce refinancing risk through 2021,” Moody’s Investors Service vice president Matthew Moore said.

“But while it's improved liquidity position removes some risk, we expect further deterioration in the retail environment from the coronavirus pandemic will pressure Scentre’s revenue, income and leverage metrics.”

Moody’s also downgraded its outlook on Vicinity Centres, which it said is exposed to the declines in tourism.

While government relief measures have aimed to mitigate some of the impact of the coronavirus outbreak on Australian businesses, banks are still attempting to understand the scale of debt they will need to provide for in response to COVID-19.

Under a broad-based recession, sluggish recovery and perverse policy outcomes—debts across the four major banks could surge to $120 billion over the 18-month period.

RetailAustraliaFinanceSector
AUTHOR
Ted Tabet
The Urban Developer - Journalist
More articles by this author
website iconlinkedin icon
ADVERTISEMENT
TOP STORIES
Exclusive

Brains, Guts and Determination: How Salvo Property Shapes Melbourne’s Skyline

Marisa Wikramanayake
5 Min
Fraser and Partners founder Callum Fraser
Exclusive

Saving Our CBDs: Architect’s Blueprint Paves Way for Office-to-Resi that Works

Leon Della Bosca
8 Min
Exclusive

Watchdog’s Court Loss Throws Spotlight on Union Balancing Act

Clare Burnett
6 Min
Time and Place's The Queensbridge Building at 90 Queens Bridge Street in Melbourne's Southbank.
Exclusive

Innovation Keeps Time & Place’s Southbank Skyscraper Rising

Marisa Wikramanayake
6 Min
Breathe Architecture founder Jeremy McLeod in front of his Featherweight Home design
Exclusive

Nightingale Founder’s Bid for Affordable Architectural Kit Homes

Leon Della Bosca
7 Min
View All >
Exclusive

Brains, Guts and Determination: How Salvo Property Shapes Melbourne’s Skyline

Marisa Wikramanayake
Novus on Victoria Chatswood
Build-to-Rent

Novus Plots Second BtR Tower for Chatswood

Renee McKeown
Westmead Gene Technologies Building EDM
Life Sciences

Plans for $272m Parramatta Biomedical Facility Go Public

Clare Burnett
The proposal for the gene therapy precinct at Westmead comes as sector investment continues to ramp up…
LATEST
Exclusive

Brains, Guts and Determination: How Salvo Property Shapes Melbourne’s Skyline

Marisa Wikramanayake
5 Min
Novus on Victoria Chatswood
Build-to-Rent

Novus Plots Second BtR Tower for Chatswood

Renee McKeown
2 Min
Westmead Gene Technologies Building EDM
Life Sciences

Plans for $272m Parramatta Biomedical Facility Go Public

Clare Burnett
3 Min
PBSA DA Hindmarsh Square student accomodation tower
Student Housing

Student-Friendly Adelaide Draws 35-Storey PBSA Proposal

Renee McKeown
3 Min
View All >
ADVERTISEMENT
Article originally posted at: https://theurbandeveloper.com/articles/scentre-secures-31bn-in-unsecured-bank-facilities-