Increased speciality store sales, but stronger in NZ than Australia: Scentre

Increased speciality store sales, but stronger in NZ than Australia: Scentre
Increased speciality store sales, but stronger in NZ than Australia: Scentre

Scentre Group, owner and operator of Westfield Australia and New Zealand, has reported comparable specialty sales in the Australian portfolio grew 5.3% over the past 12 months, with average annual specialty sales of $10,826 per square metre (psm).

It noted strong sales performance was seen across most categories, with good increases in the fashion, footwear, jewellery, leisure, health and beauty, technology and cinemas categories.

Average annual specialty retail sales in New Zealand increased to NZ$12,117 psm, representing comparable specialty sales growth of 6.6% for the year.

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

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 initial nine months.


Comparable property net operating income increased 2.6% for the 12 months, higher than the forecast range of 2.0 - 2.5%, reflecting lower vacancies and additional income streams. 

Scentre was spun out of the Westfield empire in 2014, and now runs the local malls. Westfield Corp runs the overseas malls.

It reported a 58.9 per cent drop in after tax profit to $2.71 billion for the full year, despite a 32.5 per cent jump in revenue to $2.87 billion. 

Funds from operations for the period was $1.199 billion. 

The group will pay a final dividend of 10.45c a security on February 29, taking the total dividend for the year to 20.9c. 

The results were for the 12 months to 31 December 2015. 

The Chairman of Scentre Group, Mr Frank Lowy said the rationale for the creation of Scentre Group has been validated with the strong results released today.

“Scentre Group’s pre-eminent portfolio and unique market position have provided a strong operating performance and excellent returns for security-holders since the Group was established as a separate entity.”

Scentre Group’s shopping centre assets saw significant revaluations of $1.5 billion during the year.

The value increase was driven by growth in underlying income, the completion of developments and a firming of capitalisation rates across the portfolio. The portfolio weighted average capitalisation rate reduced by 38 bp during 2015 to 5.57% reflecting the quality of the centres.

At 31 December 2015, Scentre Group had a balance sheet with total assets of $31.8 billion, a gearing ratio of 33.3% and liquidity of $3.7 billion.  

In 2015, the Group commenced $830 million (SCG share: $583 million) of redevelopments, including projects at Casey Central, Chatswood, Hurstville, Kotara, North Lakes and Warringah Mall.

“We have already opened the redevelopments at Chatswood, Hurstville, North Lakes and Kotara which are trading strongly. These developments will be accretive to earnings and create substantial long-term value,” chief executive officer of Scentre Group, Peter Allen, said

These recently opened developments featured new experiential precincts and offerings for shoppers and retailers with:

  • a “Hawker Lane” Asian dining market at Westfield Chatswood alongside a new five-level mall on Victoria Avenue including a flagship two level Topshop Topman, H&M, Uniqlo, a relocated Rebel Sport and 40 new retailers.
  • an extensive ambience upgrade and a new rooftop dining and entertainment precinct at Westfield Hurstville, with a range of late-trading casual dining outlets, linking directly to the refurbished Event Cinemas. New retailers to the centre include a Woolworths supermarket, BIG W discount department store, JB Hi-Fi HOME, Cotton On Mega Store and Rebel Sport.
  • “The Marketplace” fresh food and “The Laneway” al fresco dining precincts at Westfield North Lakes. 
  • A Hunter Valley-inspired outdoor dining and entertainment precinct, “The Rooftop”, featuring nine new restaurants, a performance stage, play area, and a new Event Cinemas complex at Westfield Kotara.

In 2016, the Group has commenced the $355 million redevelopment at Westfield Chermside, which will include the introduction of five international mini-major retailers, a broadening of the range and depth of the centre’s fashion offer as well as the largest lifestyle and entertainment precinct in an Australian centre. The centre will add 26,000 sqm of retail space bringing the total size to 156,643 sqm on completion.

At Westfield North Lakes the Group has also commenced the $140 million Stage 2 IKEA Link Mall project which connects a new IKEA-owned store with the existing centre. The development will include a new Kmart discount department store, JB Hi-Fi HOME, Rebel and approximately 50 new specialty stores over a single level with completion expected in December 2016.

Pre-development work continues across the portfolio and the Group maintains a forward development pipeline in excess of $3 billion.

During the year Scentre Group completed the sales of Figtree, Strathpine, Warrawong and North Rocks in Australia for gross proceeds of $783 million and also announced the sales of Glenfield, Queensgate and Chartwell in New Zealand for a total of NZ$549 million, the latter two being expected to settle in the first half of 2016. 

Jonathan Chancellor

Jonathan Chancellor

Jonathan Chancellor is one of Australia's most respected property journalists, having been at the top of the game since the early 1980s. Jonathan co-founded the property industry website Property Observer and has written for national and international publications.

Portfolio Scentre Group

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