Vicinity Centres announces strong performance

16 February 2024

Shopping centre owner Vicinity Centres has made a statutory net profit after tax of $223.5 million, with interim distributions per security of 5.85 cents.

Vicinity’s CEO and Managing Director, Mr Peter Huddle said: “Vicinity has had a strong start to FY24. Our operating and financial metrics highlight our continued focus on executing at pace to embed earnings resilience and prudently managing our balance sheet, while delivering on our long-term growth priorities.   

“With an elevated cost of capital, a disciplined approach to project prioritisation and focus on sustained value growth remain our guiding principles when deploying capital. 

“1H FY24 was a busy period of strategic execution and investment, and I am delighted with the momentum that has been set and the progress we have made since we refreshed Vicinity’s strategy in June 2023.”

In total, Vicinity has entered into contracts for and/or settled on asset sales totalling approximately $316 million and which have collectively delivered a 13.2% premium to combined June 2023 book values.

Total portfolio retail sales growth of 1.5% in 1H FY24 was largely driven by food including fresh food, dining, and supermarkets as well as sporting goods, cosmetics, and retail services.

Shoppers continue to show a willingness and capacity to spend, but are more discerning and value-conscious, highlighted by the strong patronage across the portfolio during the Black Friday and Boxing Day sales events. 

Mr Huddle said, “There is no doubt that elevated living costs for Australian households are now impacting consumption, particularly across the discretionary goods categories. That said, with international tourism nearing pre-pandemic levels, migration at historical highs and with a tight employment market, we continue to observe resilience. This resilience is supporting retailer confidence which continues to be reflected in our operating metrics. 

“The performance of the retail sector in 2024 ultimately depends on the level of inflation, when interest rates will peak and the extent to which employment markets remain tight.”