This article is from the Australian Property Journal archive
DESPITE consumer wariness of the higher cost of living, visitation to Westfield shopping centres has increased so far in 2024 compared to last year, according to major landlord Scentre Group.
In an operating update, Scentre Group said its 42 Westfield destinations had seen 429 million customer visits in 2024 to the end of the September quarter, some 8.7 million or 2.1% higher than the prior corresponding period (PCP) in 2023.
Total business partner sales for the nine-month period tallied $20.2 billion, 2.3% higher year-on-year.
“Demand for space from a diverse range of business partners is strong,” Scentre Group CEO Elliot Rusanow said. Portfolio occupancy was 99.4%, up 30 basis points compared to a year earlier, while average leasing spread were 1.7% to the positive, and average specialty rent escalations were 5.5% in the nine months to the end of September.
Gross rent collections in the first nine months of 2024 was $2.073 billion, $78 million more than the PCP.
Scentre reaffirmed that it expects funds from operations to be in the range of 21.75c to 22.25c per security for 2024, representing 3.0% to 5.4% growth for the year. Distributions are expected to be at least 17.20c per security for 2024, showing at least 3.6% growth.
In September, the group established the $175 million West Lakes Opportunity Trust which purchased a 50% share in Westfield West Lakes in Adelaide. It will co-manage the fund and remain as property manager and 50% co-owner of Westfield West Lakes.
Scentre stepped into the transaction under a pre-emptive agreement, marking its second foray into funds management following the June buy of a 50% interest in Westfield Tea Tree Plaza for $308 million alongside Barrenjoey.
The group is progressing a $4 billion pipeline development works, including reconfiguration of department store space at Westfield Bondi and Westfield Burwood in Sydney and Westfield Southland in Melbourne.
Meanwhile, it is progressing the expansion of Westfield Sydney and construction of the adjoining commercial and residential tower on the corner of Market and Castlereagh Streets in the CBD. As part of the Westfield Sydney expansion, a further five levels of luxury and high-end retail will be introduced, including a new Chanel boutique, while other brands to join the expanded Westfield Sydney include Moncler, Omega and Canada Goose.
Scentre has completed the $50 million repurposing of space left empty at the beginning of last year by David Jones at Westfield Mt Gravatt in Brisbane, introducing Uniqlo, Harris Scarfe, Powerhouse Gym and entertainment offerings, Area 51, Holey Moley and Hijinx Hotel.
