Scentre Group Grows Funds from Operations by 3.5% to $1,132 Million

Scentre Group (ASX: SCG) today released its results for the 12 months to 31 December 2024 with Funds From Operations (FFO) of $1,132 million (21.82 cents per security), up 3.5% on the previous year. Distributions for the period are $893 million (17.20 cents per security), up 3.8%. Statutory Profit for the period was $1,050 million.

Scentre Group Chief Executive Officer Elliott Rusanow said: “It was a difficult year following the devastating attack at Westfield Bondi on 13 April 2024. Six innocent people lost their lives and many others were impacted. We extend our deepest condolences to the families and loved ones of the victims.

“Our 42 Westfield destinations, located throughout Australia and New Zealand, represent the heart of the communities they each serve.

“In 2024 we welcomed 526 million customer visits, an increase of 14 million compared to 2023. Our Westfield membership program now has more than 4.5 million members, increasing by 0.7 million during 2024.

“Our business partners achieved a record level of sales during 2024 of $29 billion, $544 million more than in 2023.

“We continue to see strong demand from business partners with occupancy increasing to 99.6% at 31 December 2024, compared to 99.2% at the end of 2023. During 2024, we completed 3,253 leasing deals with new specialty lease spreads of 2.0%. Average specialty rent escalations were 5.2% during the 12 month period.

“Our Net Operating Income for the 2024 year was $2,030 million, an increase of 4.0% compared to 2023.

“These strong results have been enabled by the efforts and dedication of our team who are focused on creating extraordinary places and experiences that connect and enrich the community.”

Safety and security

Mr Rusanow said: “The safety of our customers, business partners, community and people is our highest priority.

“Our approach to security involves working in close partnership with law enforcement authorities, including police and relevant government agencies.

“We heightened security across all Westfield destinations following the events of 7 October 2023 and further enhanced this following the attack at Westfield Bondi on 13 April 2024.

“Whilst this has seen operating costs increase during 2024, we will continue to invest in these security initiatives.”

Westfield destinations

The Group continues to progress its $4 billion pipeline of future development opportunities.

The Group is focused on repurposing space. During the year the Group completed works at Westfield Tea Tree Plaza in Adelaide and Westfield Mt Gravatt in Brisbane with visitation up 8.6% and 6.7% respectively since opening. The Group also commenced projects at Westfield Southland in Melbourne and Westfield Burwood in Sydney.

Works began on the staged development of Westfield Bondi in Sydney, introducing Virgin Active as part of a new health, wellness and fitness precinct on level 1, alongside a new rebel rCX concept store. Planning is well advanced for the lifestyle, dining and entertainment redevelopment on level 6.

The expansion of Westfield Sydney and construction of the adjoining commercial and residential tower on the corner of Market and Castlereagh Streets in Sydney’s CBD continues, with new luxury brands progressively opening from the second quarter of 2025.

Our 42 Westfield destinations are located on more than 670 hectares of land holdings close to where millions of people live and work, as well as existing and planned transport infrastructure.

The Group has received rezoning approval at Westfield Hornsby in Sydney and Westfield Belconnen in Canberra that now provides the opportunity for large scale residential development at those sites.

Mr Rusanow said: “We have the potential to make a significant contribution to housing supply at our locations across Australia and New Zealand. We are focused on how we can create substantial long term growth for the Group by adding density to our large and uniquely located strategic land holdings.”

Capital management and strategic initiatives

During the period, the Group continued its proactive approach to capital management.

As at 31 December 2024, the Group had available liquidity of $3.6 billion. In September, the Group completed a tender offer for approximately $900 million of non-call 2026 subordinated notes, which was funded through the issuance of new subordinated notes.

In November, the Group issued $1.25 billion of senior notes, extending the weighted average maturity of debt. The Group has increased its level of interest rate hedging to 94% at January 2025 with an average base rate of 2.99%.

During the period, the Group leveraged its platform and capability to successfully establish two external trusts to become joint venture owners. In June the $310 million Tea Tree Opportunity Trust purchased a 50% share in Westfield Tea Tree Plaza. In September the $175 million West Lakes Opportunity Trust acquired a 50% share in Westfield West Lakes in Adelaide. In each instance, Scentre Group continues to own the remaining 50 per cent of the centre.

Outlook

Mr Rusanow said: “Our strategy to attract more people to our destinations and unlock growth opportunities is expected to continue to deliver growth in earnings and distributions.”

Subject to no material change in conditions, the Group’s target for FFO is 22.75 cents per security for 2025, representing 4.3% growth for the year.

Distributions are expected to grow by 2.5% for 2025 to 17.63 cents per security.