The Urban Developer
AdvertiseEventsWebinarsUrbanity
Industry Excellence
Urban Leader
Sign In
Membership
Latest
Menu
Location
Sector
Category
Content
Type
Newsletters
Urban Leader Awards Logos RGB White
EARLY BIRD ENDING THIS THURSDAY START YOUR NOMINATIONS TODAY
EARLY BIRD ENDING THIS THURSDAY URBAN LEADER AWARDS
LEARN MOREDETAILS
TheUrbanDeveloper
Follow
About
About Us
Membership
Awards
Events
Webinars
Listings
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
6
print
Print
RetailTed TabetFri 23 Aug 19

Scentre Remains Optimistic Despite 49pc Drop in Profits

fed89a05-644b-48b1-ac00-563ee03f2d96

Australasian shopping mall giant Scentre Group has hit guidance with a 3 per cent lift in earnings to $676.2 million, despite a troubled outlook for retail sector.

While anemic consumer spending has put pressure on Australia’s shopping centre landlords, Scentre Group has been remixing its Westfield shopping centre portfolio to meet demands for leisure-focused customers and to combat the threat posed by e-commerce.

Announcing its full year earnings, the group said annual sales at its $54.6 billion Westfield portfolio had increased to $24.4 billion, accounting for more than seven per cent of all retail sales in Australia, with customer visitation hitting 535 million.

In its first half, the company generated funds from operations of $676.2 million.

Statutory profit fell 49.4 per cent $740 million for the half year down from $1.46 billion at the same stage of the previous year.

Scentre pointed to higher property revaluations recorded in the preceding year's first half while also taking into account some asset sales and centre redevelopments.

The group forecast growth in funds from operations for its full year of around 0.7 per cent, which takes into account the impact of its recent transactions. Distributions for the half at 11.3 cents were also in line with forecast.

▲ The group’s 41 shopping centres in Australia and New Zealand were almost full at 99.3 per cent occupancy, drawing in 118 new brands and 117 existing brands expanded during the year. Image: The Emporium Melbourne


Scentre chief executive Peter Allen is looking to position the group as the best platform for retailers looking for both a physical and online presence repositioning its Westfield centres towards experience-based offerings.

A staggering 42 per cent of the group's portfolio now boasts experience based offerings which can only be consumed on-site, including dining, entertainment, health, fitness, financial, education and beauty services.

“The first six months of 2019 has been an active period for the Group as we focus on delivering what the customer wants,” Allen said.

“We have been able to achieve this whilst continuing to grow cashflow and distributions for our security holders and maintain our strong financial position.”

Allen noted re-leasing spreads, which are the difference between rent charged for new tenants and what existing tenants pay in renewal, was negative 4.5 per cent, compared with the negative 4.8 per cent for the same time last year.

The comparative sales growth for specialty stores was up 2.3 per cent.

▲ The landlord has reconfirmed its full-year distribution forecast for 2019 of 22.6¢, an increase of 2 per cent. Image: Westfield Chermside


The first half was dominated by the decision to divest $2.1 billion in capital to pursue “strategic objectives”, selling office towers above Westfield Sydney to US private equity giant Blackstone in a $1.52 billion deal and the $575 million half stake in Westfield Burwood to the Perron Group.

Scentre plan to recycled capital from those transactions back into the redevelopment of the Westfield malls and funding a security buy-back program of up to $800 million.

“We will continue to invest in deepening our understanding of the customer and maintain our relentless focus on what they want,” Allen said.

The company has a $3 billion future development pipeline, including expanding its Westfield Sydney into the David Jones ­department store space in the city’s CBD.

It is also constructing an office tower above Westfield Parramatta and the new-look Doncaster Shopping town in Melbourne, due for completion mid-2020.

The group also opened the Bradley Street dining precinct at Westfield Woden while at Westfield Carindale a new Kmart will be introduced.

The first 40 shops in the 230-store NZ$790 million (AUD$750 million) Westfield Newmarket, which is New Zealand's biggest retail redevelopment at 8.8 hectares, will open at the end of this month.

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

Pop-Out Apartments Power GemLife’s $450m Vertical Experiment

Clare Burnett
6 Min
Scape's Gurrowa place artist impression
Exclusive

Red Tape Blocking PBSA Housing Crisis Help, says Sector Pioneer

Leon Della Bosca
5 Min
Rob Stokes on Faith Land Housing Opportunities across australia
Exclusive

Salvation at Hand: Why Ex-MP is Championing Faith-Based Land Development

Renee McKeown
6 Min
Childcare shortfall EDM
Exclusive

Childcare Crunch: $4bn Shortfall Opens Door for Developers

Vanessa Croll
7 Min
Adelaide old and new buildings
Exclusive

In with the Old: Why Building Coalition Says Reuse Must Trump Redevelopment

Leon Della Bosca
7 Min
View All >
Residential

Significant Murray Bridge Development Site Listed

Taryn Paris
Sponsored

Navigating Infrastructure Hurdles on Road to Brisbane 2032

Partner Content
Real Estate

Sunshine Coast’s Landmark The Wharf Precinct on Block

Lindsay Saunders
The Mooloolaba asset has been held for a decade by the developer that repositioned it to attract 2.2 million visitors an…
LATEST
Residential

Significant Murray Bridge Development Site Listed

Taryn Paris
2 Min
Infrastructure

Navigating Infrastructure Hurdles on Road to Brisbane 2032

Partner Content
6 Min
Real Estate

Sunshine Coast’s Landmark The Wharf Precinct on Block

Lindsay Saunders
2 Min
 GemLife site Currumbin Waters EDM
Exclusive

Pop-Out Apartments Power GemLife’s $450m Vertical Experiment

Clare Burnett
6 Min
View All >
ADVERTISEMENT
Article originally posted at: https://www.theurbandeveloper.com/articles/westfield-owner-remains-optimistic-despite-49pc-profit-plunge