The solid rebound in bricks and mortar retailing saw Scentre Group, the country’s biggest shopping centre operator, lift both operating profit and funds from operations (FFO) by double digits in the six months to June 30.
Scentre is the old Westfield mall owner and its dominant position in Australasian retailing was underlined by the June 30 performance as it put behind it the lockdowns and Covid restrictions in Australia and NZ at the start of the year and in 2021.
Scentre reported a 17.5% rise in operating profit to $540.5 million (or 10.4 cents a security) and FFO of $548.6 million (10.6 cents a security), up 18.3%.
Net operating cash flow (after interest, overheads and tax) rose 17% to $570.2 million while statutory profit for the half year was $479.8 million, including property revaluation gains of $286.1 million.
The distribution for the six-month period of 7.50 cents a security is up 7.1% and will absorb $388.8 million.
Scentre Group CEO Peter Allen said in Tuesday’s statement: “We’ve grown customer visitation, portfolio occupancy, rental income and cash collection resulting in strong profit growth for the half.
“Our customer focused strategy is to create the places that more people choose to come, more often, for longer. We have welcomed more than 277 million customer visits in the year to date and expect to achieve approximately 500 million visits in 2022.
“In the six-month period to 30 June 2022, our business partners achieved over $12.0 billion of sales, $800 million more than the first half of 2021 and $500 million more than the first half of 2019, pre- pandemic.
“We have increased portfolio occupancy to 98.8%, up 30bps since 30 June 2021. During the first six months we completed 1,579 lease deals, with leasing spreads improving significantly to (3.9%). These lease deals included 585 new merchants of which 108 brands are new to the portfolio.
“Average rent across the entire portfolio has increased $5 per square metre since 30 June last year, to $827 per square metre. Average specialty rent escalations were 5.6% for the six months to 30 June 2022. This reflects the value of our standard lease structure with specialty leases having average annual rent escalations of CPI + 2%.
“Gross rent collection during the half was $1,250 million, exceeding billings and reducing debtors. The Group has seen continued strong collections with a further $220 million collected in July.”
