Scentre Group (ASX:SCG) Reports Q1 2025 Operating Update

Operational Performance

Scentre Group reported that customer visits to its 42 Westfield destinations reached 179 million in the 18 weeks to 4 May 2025, marking a 2.3% increase compared to the same period in 2024. Business partners achieved $6.7 billion in sales for the three months ended 31 March 2025, up 2.8% from the previous year. On a rolling 12-month basis, business partners’ sales reached a record $29.1 billion. Portfolio occupancy stood at 99.6% as of 31 March 2025, with average specialty rent escalations of 4.4% during the quarter. The Group completed 635 leasing deals with an average leasing spread of +2.1%.

Redevelopment Projects

Progress continues on the redevelopment of Westfield Bondi in Sydney, where the new Virgin Active lifestyle fitness centre and rebel rCX concept store on Level 1 are set to open in June 2025. Additionally, the expansion of Westfield Sydney on the corner of Market and Castlereagh Streets is underway, with new luxury brands scheduled to open from May 2025. In March, Westfield Warringah was declared a state significant development, with the potential to create up to 1,500 dwellings.

Financial Update

In March, the Group completed the make-whole redemption of all remaining Subordinated Non-Call 2026 Fixed Rate Reset Notes totaling $1.0 billion. This was funded through $350 million of undrawn bank facilities and a new $650 million Subordinated Non-Call 2031 Note at a margin of 2.0%.

Outlook

The Group reaffirmed its target for Funds from Operations (FFO) of 22.75 cents per security for 2025, representing 4.3% growth for the year. Distributions are expected to increase by 2.5% for 2025 to 17.63 cents per security.

Executive Comments

Chief Executive Officer Elliott Rusanow stated, “Customer visitation to our 42 Westfield destinations in the 18 weeks to 4 May 2025 was 179 million, up 2.3% or 4.1 million more than the same period in 2024. Our business partners achieved $6.7 billion of sales in the 3 months ended 31 March 2025, up 2.8% compared to the same period in 2024. On a rolling 12-month basis to 31 March 2025, our business partners achieved record sales of $29.1 billion. We continue to see strong demand from businesses to lease space in our destinations. Portfolio occupancy is 99.6% at 31 March 2025. Average specialty rent escalations were 4.4% during the 3 months to 31 March 2025. The Group completed 635 leasing deals in the quarter, with an average leasing spread of +2.1%.”

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