Vicinity posts interim results, appoints Westfield exec as new COO

Vicinity Centres has hired Peter Huddle, a Westfield executive from the US with more than 18 years’ experience in shopping centre management, as its chief operating officer.

Huddle was most recently COO of Unibail-Rodamco-Westfield, following the acquisition of Westfield by Unibail Rodamco in 2018. Prior to that, he was senior executive vice president and co-country head of Westfield in the US.

As COO at Vicinity Centres, a newly created role within the executive committee, Huddle will be responsible for leasing, shopping centre management, operations and marketing, and will report to Vicinity CEO and managing director Grant Kelley.

Huddle will join Vicinity from 1 April 2019.

The real estate investment trust company reported its FY19 interim results on Friday, declaring $235.3 million in statutory net profits for the six months to 31 December 2018, a 68.9 per cent fall from the $755.9 million declared in the same period of FY17.

Funds from operations of $349.5 million (9.06 cents per security) reflect 2 per cent comparable growth.

Specialty store moving annual turnover increased 6 per cent in the half, to $10,746 per sqm, with Chadstone and premium CBD centres reporting $18,423 per sqm. Specialty store and mini majors moving annual turnover increased 4.2 per cent in the half, up from 1.6 per cent at June 2018.

Vicinity reported progress on value-accretive developments in the half, including the opening of the first DFO in Perth, the opening of stage three of The Glen and the opening of Australia’s first full-line Victoria’s Secret store at Chadstone.

Going forward, Vicinity said it is prioritising flagships and strategic high-potential assets.

In January, the company announced a $37 million decline in the value of its retail portfolio over the six months to 31 December 2018, following an independent valuation of 38 of its 62 properties and an internal review of the rest.

The total valuation across the group’s 62 centres fell to $15.83 billion over the period, a 0.2 per cent decline.

Net valuation declines were seen across regional (2.6 per cent), sub-regional (1.6 per cent) and neighbourhood centres (5.7 per cent), while the group’s “flagship portfolio”, which includes such assets as Chadstone shopping centre, various CBD assets and DFO centres, saw a valuation increase.

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    Jim posted on February 16, 2019

    Let me say from the outset I’m a VCX shareholder and I certainly want them to prosper and wish the new COO all the best. However, the days when shopping centre owners can demand extortionate increases in rent are well and truly gone. To prevent any future calamity, I feel the first objective for the new COO would be tie down existing large tenancies with lease renewal to minimal rent increases and in some cases no rent increases to reflect the state of consumer spending brought upon in part by house price drops which seem to have a lot further to go. With MYER and DJ’s looking very closely at their business model with impending store closures this might be the first place to look. Specialty stores in malls require anchored large department stores to prosper and if they go, so will some of the former as well. I don’t care how much experience the new COO has; there is a new environment out there and it spells trouble for greedy landlords across the length and breadth of retail. There is a fine balance and ultimately the success of the new COO will be judged by getting it right. reply

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