SYDNEY – A sharper property portfolio boosted net profit at Scentre Group, which operates Westfield shopping centers in Australia, 10.4 percent in 2016. Profit was 2.99 billion Australian dollars, or $2.22 billion, in the 12 months to Dec. 31, outstripping market expectations.
The results include 1.6 billion Australian dollars, or$1.19 billion, from property revaluations.
Gross income dropped 12.1 percent to 2.52 billion Australian dollars, or $1.88 billion, mostly from asset sales, while funds from operations rose 3.2 percent to 1.24 billion Australian dollars, or $921 million. All figures have been converted at average exchange rates for the periods to which they refer.
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Total retail sales were 22.7 billion Australian dollars, or $17 billion, up 1.8 percent, while the group reported 99.5 percent occupancy across the portfolio.
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Last year, Scentre completed and opened 665 million Australian dollars, or $495 million, worth of redevelopments, including Westfield Warringah Mall on Sydney’s Northern Beaches and Westfield North Lakes in Queensland.
It let go of 368 million Australian dollars, or $274 million, in non-strategic assets in Australia and New Zealand and undertook 605 million Australian dollars, or $450 million, worth of new developments, including the upgrade of Westfield Chermside in Queensland, which is due to open in June with stores including Zara, H&M, Uniqlo and Sephora.
Scentre Group chief executive officer Peter Allen said the results were above guidance and reflected “strong operational performance” across the portfolio.
“Our long-term strategy is to own the highest quality shopping center portfolio in Australia and New Zealand. We have now completed the divestment of nine shopping centers that did not meet this objective, which has refined our portfolio to meet the dynamic needs of both retailers and consumers.”
Scentre Group has 45.7 billion Australian dollars, or $35.1 billion, in total assets under management, including interests in 39 shopping centers in Australia and New Zealand housing approximately 11,500 shops. The group has 3 billion Australian dollars, or $2.3 billion, in the development pipeline across 13 centers.
Projects include the redevelopment of David Jones’ 77 Market Street, Sydney store, which was purchased by Scentre Group and Melbourne-based Cbus Property in August for 360 million Australian dollars, or $275 million.
By 2021, the development will add an additional 107,639 square feet of multi-level, luxury retail space to the adjacent Westfield Sydney.