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Highlights
- Scentre Group sees a 2.1% increase in customer visits, reaching 429 million as of 3 November 2024.
- Business partner sales grow by 2.3% year-on-year to AU$20.2 billion.
- Total annual sales reach a record AU$28.8 billion by September 30, 2024.
- Portfolio occupancy rises to 99.4%, up 30 basis points from last year.
- The company progresses with its AU$4bn retail development pipeline, including major projects in Sydney and Melbourne.
- Scentre issues AAU$900m in subordinated notes, refinancing USAU$656 million of debt, and establishes the AU$175m West Lakes Opportunity Trust.
Scentre Group (ASX:SCG), the owner and operator of 42 Westfield centres across Australia and New Zealand, has delivered an optimistic operational update for the year to date. As of November 3, 2024, the company reported a 2.1% increase in customer visits, totaling 429 million visits, compared to the same period last year. This uptick in foot traffic highlights sustained interest in Scentre Group's retail properties, reflecting resilience in the face of broader economic challenges.
Business partner sales also demonstrated strong growth, reaching AU$20.2 billion, marking a 2.3% year-on-year increase. This rise in sales reflects the ongoing success of Scentre's retail environments and the continued strength of its partnerships with various businesses. The total annual sales for Scentre Group achieved a milestone of AU$28.8 billion by September 30, 2024, underscoring the company's dominant position in the retail sector.
The group’s portfolio occupancy rate remained impressive, standing at 99.4%, an increase of 30 basis points compared to September 2023. This high occupancy rate is indicative of the company's ability to attract and retain tenants, a critical factor for its sustained performance. Scentre also reported positive average leasing spreads for the first nine months of 2024, at +1.7%, along with specialty rent escalations averaging +5.5%. Additionally, the company collected AU$2.073 billion in gross rent, an increase of AU$78 million compared to 2023.
Scentre Group is also making significant strides in its development plans, with a AU$4 billion retail development pipeline that includes key projects in Sydney and Melbourne. These projects include the expansion of Westfield Sydney, as well as major reconfigurations at Westfield Bondi Junction and Southland. These developments demonstrate Scentre's commitment to enhancing its retail offerings and adapting to changing consumer behaviors.
In terms of financing, the company issued AAU$900 million in subordinated notes in September, using the funds to refinance USAU$656 million in existing debt. This move is expected to reduce costs and improve the company’s financial flexibility. Additionally, Scentre co-established the AU$175 million West Lakes Opportunity Trust, acquiring a 50% stake in Westfield West Lakes in South Australia. This strategic acquisition further strengthens the group's portfolio and supports its long-term growth strategy.
Scentre Group has reaffirmed its 2024 funds from operations (FFO) forecast, projecting a range of 21.75 to 22.25 cents per security. The company also anticipates distribution growth of at least 3.6%, with a minimum distribution forecast of 17.20 cents per security.
