Westfield centres almost at full capacity

WestfieldThe owner of Westfield shopping centres in Australia and New Zealand says store space across its 39 properties is almost completely occupied.

Scentre Group chief executive Peter Allen said at the company’s annual general meeting yesterday that Westfield continues to attract popular brands as part of its tenancy mix.

“We’re continuing to improve the retail product offering by introducing more on-trend and desirable brands,” he said.

“In turn, these brands are driving demand for retail space across our portfolio – which remains more than 99.5 per cent leased.”

Allen said Scentre’s “operational merit hinges” upon the ability to attract the best retailers to the right centres.

“If we can get this right, our job is already half done, and so the art and science of retail curation has been — and will continue to be — an area of considerable focus for Scentre Group,” he said.

The strong demand for store space exists despite tough conditions for retailers, illustrated by the recent financial collapse of Pumpkin Patch, Marcs, David Lawrence and Payless Shoes.

Allen said Westfield’s 30 fastest growing tenants in Australia have increased their aggregate number of stores from 151 to 438 in the past five years.

Specialty retail sales grew by 2.6 per cent in 2016 at Australian Westfield centres, with growth across most categories.

Scentre still expects its funds from operations to grow by about 4.25 per cent in 2017, compared to 3.2 per cent in 2016.

Brian Schwartz AM, company chair, said in the last year, the group has completed and opened $665 million of redevelopments and commenced $605 million others, stating that through those projects, they continue to execute their purpose of “creating extraordinary places, connecting and enriching communities.”

“Our development pipeline is in excess of $3 billion, providing us with ongoing opportunities which include the the new ‘greenfield’ development at Westfield Coomera in Queensland and the group’s first development in New Zealand at Westfield Newmarket in Auckland,” he said.

The construction of its first new centre in more than 10 years at Coomera on the Gold Coast will likely begin in the next 12 months.

Scentre made a net profit of $2.99 billion in 2016, up 10 per cent on 2015.

Its shares were up half a cent at $4.385 at 1220 AEST.

Allen reaffirmed forecasts of funds from operations growth of about 4.25 per cent for 2017, the same figure given in the group’s full-year results in February. The 2017 distribution is forecast to rise 2 per cent to 21.73c per security.

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