Supermarket landlord’s profit decline

Woolworths Supermarket AustraliaThe Shopping Centre Australasia Property Group has reported a sliding net profit, which the company attributed to a smaller increase in the value of its investment properties during the period.

The company revealed a net profit of $90.8 million for the six months ending in December 2015, which is a 7.5 per cent decline on the same period of the previous year, which was $98.2 million.

The decline in profit came despite the company’s strong 15.6 per cent increase in revenues over the same period, reaching $99.2 million.

SCA’s shopping centre portfolio, which includes supermarket giants Woolworths and Coles, has managed an annual sales growth of over 5 per cent despite the slowdown in sales growth from its supermarket anchors.

Anthony Mellowes, the company’s chief executive officer, said their young centres “have a lower specialty rent per square metre than more mature centres, and our average specialty occupancy cost is now 8.9 per cent.”

Mellowes said they are confident they “will be able to increase rent per square metre over the medium term.”

He disclosed they had 31 specialty tenant renewals during the first half of the fiscal year 2016 across 2,902 sq.m. of GLA where an average rental uplift of 9.8 per cent was achieved. This, according to him, was “a positive start to our first rent renewal cycle which will continue through FY 16 to FY 20.”

Mellowes revealed they are on the lookout for more acquisitions to continue to drive growth.

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