This article is from the Australian Property Journal archive
WESTFIELD shopping centre owner Scentre Group has posted a 20.6% increase in full-year funds from operations, which along with distributions exceeded guidance, as it posted record lease agreement and rent collection numbers.
Distributions were up 10.5% to 15.75c per security, and a further 4.8% rise is expected for 2023 to 16.5c. Earnings are forecast to rise by between 3.4% and 5.9% to between 20.75c and 21.25c.
Funds from operations hit $1 billion, or 20.06% per security. Net profit fell to $301 million due to financing costs.
Scentre completed a record 3,409 lease deals during the year, an increase of 912 on the year prior. This included 2,232 renewals and 1,177 new merchants, of which 288 are new brands to our portfolio. This resulted in portfolio occupancy increasing from 98.7% to 98.9% over the year.
It also booked a record $2.592 billion in gross rent collections, $334 million more than 2021. Net operating cashflows lifted 29.3% to $1.181 billion.
During the year Scentre Group transitioned its senior leadership with Elliott Rusanow commencing in the role of CEO and Andrew Clarke in the role of chief financial officer. Both were internal appointments.
“I am very pleased with these results, driven by the group’s strong operating performance and proactive customer strategy to attract more people to our Westfield destinations,” Rusanow said.
Customer visits topped 480 million customer visits, up 67 million on 2021, and Rusanow said that so far in 2023 there have been about 70 million visits, an increase of more than 10 million compared to the same period in 2022.
The increase in visits flowed through to its business partners achieving sales of $26.7 billion, up 21.0% compared to 2021, representing a record level of sales across the Westfield portfolio.
Stage one of the $355 million investment in Westfield Knox, including new Woolworths and ALDI supermarkets, opened in December and the remaining stages of the development will be opened throughout 2023.
The $55 million investment at Westfield Mt Druitt opened in March, including a new rooftop dining, entertainment and leisure precinct, featuring 15 restaurants and indoor-outdoor community spaces for the community.
In November a $33 million investment at Westfield Penrith was completed, including the introduction of new casual dining experiences, a Coles supermarket and an entertainment precinct, while the $33 million investment in Westfield Parramatta opened in December, including a new fresh food precinct featuring Coles, ALDI, and a Tong Li supermarket, among other specialty retailers.
The group has available liquidity of $4.8 billion, and balance sheet gearing was 27.3%.
Meanwhile, the Scentre-managed Carindale Property Trust, which owns a half interest in the $1.75 billion Westfield Carindale in Bri asbane’s south east, posted a 0.6% uplift in half-year funds from operations.
Annual customer visitation was up 12.8% to 14.1 million during the period, and the centre reached the annual retail sales mark of $1.0 billion, an increase of 13.4%. Occupancy increased 70 basis points to 99.4%, while the trust collected $32.6 million of gross rent.
Distributions was $9.7 million or 13.125c per unit, in line with guidance. Fully year distribution is forecast to be 26.25c per unit, showing growth of 5.0%.
