First half profit for Shopping Centres Australasia Property Group (SCA) more than doubled to $204.7 million thanks to a sharp jump in the value of its investment properties.
The company is a property spin off from Woolworths and rise in market value and its impact on statutory profit overshadowed a 20% rise in revenue from continuing activities lifted to $108 million in the six months to December 31, while its funds from operations rose 9.6% to $53.5 million.
SCA will pay an interim distribution of 6.4 cents per unit, up 6.7% from the prior corresponding period.
And the company increased its fiscal 2017 funds from operations guidance from 14 cents per unit to 14.6 cents per unit. The full-year distribution forecast has also been increased from 12.6 cents per unit to 13.1 cents per unit.
SCA Property is one of the largest landlords for Woolworths and Coles supermarkets, and it boosted full year guidance 1.4% while saying that while its tenants’ sales were sluggish from the ongoing price wars, there were some signs of improvements.
It said specialty stores sales were boosted by improved leasing deals, where new tenants’ rents were being signed but with lower incentives.
“Our specialty and mini-major tenants continue to perform strongly, again recording healthy annual sales growth, despite the continuing subdued sales growth from our supermarket anchors,”CEO Anthony Mellowes said in yesterday’s statement.
“Our young centres have a lower specialty rent per square metre than more mature centres.
“We remain confident that we will be able to achieve increases in rent per square metre over the medium term.”
SCA Property now has a portfolio valued at $2.02 billion. The group owns 74 neighbourhood, sub-regional and freestanding retail shopping centres situated across country.
Mr Mellowes did not elaborate on the group’s 4.9% interest in rival Charter Hall Retail REIT (CQR) that it bought last year for $83.4 million, except that it “remains accretive”.
SCA securities rose 2.27% to $2.24 in a generally weaker market.
