Scentre reports 5.9% growth in specialty sales for nine months till September

Scentre Group announced its third quarter operational update today, with its specialty sales growing 5.9% for the nine months of the year up to September 30.

Chief executive Peter Allen said 2015 would be Scentre’s first full-year of operations as an independent entity

It had started $830 million of development starts this year.

As at September-end, its portfolio remained more than 99.5% leased.

Specialty stores, or retail outlets that focus on a particular product range, grew 5.4% for the quarter.

In particular, the footwear, leisure, jewellery and technology and appliances retail categories performed well, Scentre said.

The strong growth in specialty sales for the period outpaced the growth in specialty store rents, and cut specialty store occupancy cost to 17.9%.

In Australia, average specialty retail sales rose to $10,666 per square metre and comparable specialty store sales growth was 5.8% for the nine months.

In New Zealand, average specialty retail sales increased to NZ$10,534 per square metre, and comparable specialty store sales growth was 6.5% for the nine months.

Scentre reconfirmed its forecast funds from operations (FFO) of 22.5 cents per security, representing a 3.5% growth with a distribution forecast of 20.9 cents per security for the 12 months ending December 31.

For the nine months, re-leasing spreads were down 2.5%, slightly better from a year earlier when they fell 4.2%.

Comparable net operating income growth for the 12 months to 31 December 2015 is expected to be at the high end of the guidance range of 2.0-2.5%.

Scentre's new starts include projects at Westfield Chatswood, Hurstville, North Lakes, Kotara, Casey and Warringah and focus on expanding the food, dining and entertainment precincts, as well as introducing new retailers.

The projects at Westfield Hurstville, Chatswood, Kotara and North Lakes are likely to open before Christmas.

Its $670 million design and construction project being undertaken at Pacific Fair is on track, the company said.