Scentre Group appears on track for a strong first full-year independent of Westfield, unveiling a strong lift in sales in the nine months to September and reiterating its guidance.
Speciality store sales grew 5.9 per cent in the nine months to September 30, and increased 5.4 per cent in the September quarter. The growth was spurred by the strong performance of the footwear, leisure, jewellery and, technology and appliances retail categories.
The growth in specialty sales for the period outpaced the growth in specialty store rents, and reduced store occupancy cost to 17.9 per cent.
Scentre still expects funds from operations (FFO) of 22.5c per security for the full year, which represents 3.5 per cent growth. Meanwhile, the full-year distribution forecast of 20.9c per security was also retained.
The company was created through the merger of Westfield Group’s Australian and New Zealand assets and operating platform with Westfield Retail Trust.
“Scentre Group has delivered continued strong portfolio performance, commenced $830 million of development starts in 2015, introduced several new technology initiatives and reallocated capital to higher quality assets,” chief executive officer Peter Allen said.
As at September 30, Scentre said its portfolio remained over 99.5 per cent leased.
Australian average specialty retail sales increased to $10,666 per square metre and comparable specialty store sales growth was 5.8 per cent, year-to-date.
In New Zealand, average specialty retail sales increased to $NZ10,534 per square metre, while comparable specialty store sales growth was 6.5 per cent over the nine month period.
The third-quarter update comes just a week after Frank Lowy announced he was set to retire as chairman of Scentre Group in May 2016, to be replaced by deputy chairman Brian Schwartz.