This article is from the Australian Property Journal archive
WESTFIELD owner Scentre Group’s (ASX: SCG) “destination” retail strategy continues to pay off with its 42 shopping centres attracting over half a billion customers during the year – more than 18 times the size of Australia’s population.
Scentre has posted a statutory profit of $174.9 million for the 12 months to 31 December 2023, despite an unrealised property valuation decrease of $1,017.1 million.
Scentre Group posted FFO of $1,094.2 million, or 21.11 cents per security, up 5.2% on the previous year.
Distributions were at $860.6 million or 16.60 cents per security, up 5.4% and above guidance.
“Our focus on creating the places and experiences that more people choose to come to, more often and for longer, has delivered strong operating performance with Net Operating Income increasing by 8.8% to $1,951 million,” said Elliott Rusanow, CEO at Scentre Group.
“Customer visitation to our 42 Westfield destinations for the year was 512 million, up 32 million or 6.7% on 2022. This was underpinned by our activation program which included new strategic partnerships with leading brands Disney, Live Nation and Netball Australia.”
Scentre Group’s business partners achieved $28.4 billion in sales, an increase of $1.7 billion or 6.4% compared to 2022 and representing a record across its Westfield platform.
The group’s occupancy increased to 9.2% at 31 December 2023 compared to 98.9% at 31 December 2022.
With 3,273 leasing deals completed across the period, including 397 new brands to the portfolio.
Specialty rent escalations increased by 7.5% on average and new lease spreads improved to +3.1%.
$2,723 million of gross rent was collected over the year, an increase of $131 million compared to 2022 and equivalent to 103% of gross rental billings for the period.
“During the year we continued our focus on strategic customer initiatives including our Westfield membership program. We now have over 3.8 million members, an increase of 640,000 for the year,” added Rusanow.
Scentre Group’s pipeline of future retail development opportunities sits at $4.0 billion.
Available liquidity is at $3.5 billion, which can cover all debt maturities until the end of 2025.
Scentre Group has increased its interest rate hedging to 92% at January 2024, at an average rate of 2.65% and 80% at December 2024, at an average rate of 2.84%.
Scentre Group is anticipating FFO to be in the range of 21.75 to 22.25 cents per security for 2024, representing 3.0% to 5.4% growth for the year.
With distributions are expected to be at least 17.20 cents per security for 2024, representing at least 3.6% growth for the year.
