Vicinity Centres reports net profit of $1.2 billion

The Glen vicinity centreVicinity Centres reported $1.2 billion net profit after tax (NPAT) in fiscal 2018, representing 2.2 per cent comparable growth, and portfolio occupancy of 99.7 per cent.

The property company’s retail portfolio remained strong at the end of June 2018, with leasing spreads positive at 0.7 per cent and comparable specialty sales per sqm increased 7.5 per cent to $10,133, with a specialty occupancy cost of 14.7 per cent.

Moving annual turnover (MAT) was 1.6 per cent for specialty stores and mini majors, up from 0.8 per cent in 2017.

Vicinity Centres CEO Grant Kelley said the company had a “solid financial performance” in FY18 and continued to strengthen its portfolio through the acquisition of the Sydney CBD centres, asset divestments and progressing our development pipeline.

Kelley highlighted three major strategic initiatives which he described as “transformational” for Vicinity.

“In June 2018, we announced the planned divestiture of up of $1 billion of non-core assets over the course of FY19.

“Earlier this month, we also announced the establishment of a 50:50 joint venture with Singapore’s Keppel Capital to manage a new wholesale property fund, Vicinity Keppel Australia Retail Fund (VKF), proposed to be seeded with approximately $1 billion of assets from Vicinity’s balance sheet.

“And thirdly, as flagged earlier this year, we have identified the potential to unlock significant value through mixed-use developments across the portfolio… We have identified 12 significant mixed-use projects and potential value upside of approximately $1 billion for Vicinity.”

Kelley noted that the $1 billion divestment program, as well as the proposed VKF, will completed a planned capital recycling program, with the proceeds from such transactions invested in opportunities that provide the group

“Moving forward, we will deliver strong and sustainable growth through focusing our portfolio… the three strategic initiatives that have been announced… will position the company for strong growth,” he said.

Vicinity noted it was rated as the number one retail property company in Australia and the Asia Pacific region for sustainability by Global Real Estate Sustainability Benchmark.

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