By a staff reporter
Writedowns on the value of its Melbourne Myer Emporium and readjustments to valuations on other properties have pushed Colonial First State Retail Property Trust Ltd’s full-year profit down almost 40 per cent to $295 million.
CFS, whose portfolio consists of interests in 29 retail properties, said it underperformed the benchmark retail property index by 2.5 per cent in the half to June 30, and suggested that conditions were likely to remain challenged in the year ahead.
Shopping centre sales for the year rose just 2.8 per cent to $6.64 billion dollars, with department stores down 1.2 per cent. A rare bright spot was a 9.4 per cent rise in sales at DFO discount outlets, which rose to $421 million.
That equated to a drop in rental and property income of just under one per cent to $725 million. Taking account for an upward valuation in investment properties in the previous year, the total revenue decline was 18 per cent.
Michael Gordon, CFS fund manager said, “While there continue to be challenges in the Australian retail environment, several macroeconomic indicators remain supportive for retail expenditure.
Positive real wages growth continues, the housing market is picking up and the rate of growth in offshore travel has slowed in recent months compared to previous years.
"We remain cautious on retail sales and forecast retail specialty sales growth of 3 per cent for the CFS portfolio over FY14," the group said.
Over the year, CFS wrote down the value of its Myer Melbourne Emporium, due to open in Q1, 2014 by $63 million.
The company announced a distribution of 13.6 cents for the year a 3.8 per cent increase on the previous year.