Scentre Group posts 2.5 pc sales growth boosted by development pipeline

Jewellery, mobile phones, tech gadgets and a turnaround in department stores' performance were the backbone for retail landlord Scentre Group's comparable specialty sales growth of 2.5 per cent for the six months to June 30.

That took average specialty sales to $11,000 per square metre. For the nine months to September 30, which included the most recent school holidays, comparable specialty sales grew 3.4 per cent, to an average of $11,142 per sq m.

The new David Jones store at Barangaroo is the first small format store  for the chain.
The new David Jones store at Barangaroo is the first small format store for the chain. Photo: Ben Rushton

Reflecting the lack of blockbuster movies, the cinemas within the malls reported sales growth of only 0.9 per cent and for the nine months to the end of September were a negative 1.9 per cent.

But the demand for more mobile phones, tablets and other technology, saw that division's sales grow 5.7 per cent for the nine months to September 30.

There was a slight decline in supermarket sales, as that sector battles a price war and increased competition.

Pampering remains high on shoppers' lists with health and beauty sales up 4.3 per cent over the nine months ending September.

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Scentre owns and operates 40 Westfield shopping centres across Australia and New Zealand with assets under management of $43.3 billion and is considered the retail market bellwether. 

The group chief executive Peter Allen said the results were strong and reflect the "benefits of focusing on the highest-quality shopping centres in Australia and New Zealand. Our portfolio is well positioned to continue to deliver long-term growth."

Earlier this month the group said that, jointly with Cbus Property, it had bought the David Jones Market Street building in Sydney's CBD. On completion, Scentre Group will own the redeveloped retail site, adding an additional 10,000 sq m of luxury retail space.

Construction also started on $605 million (Scentre's share being $480 million) of developments including projects at Westfield Chermside, Queensland, Westfield North Lakes, Queensland and Westfield Whitford City, Western Australia.

Overall, the group's development pipeline continues to be in excess of $3 billion. That also includes a proposed office tower on the top of its Westfield Parramatta shopping centre.

Mr Allen said funds from operations (FFO), for the six months to June 30, are $617 million, representing 11.61¢ per security and distribution of 10.65¢ per security.

Mr Allen said the group was on track to deliver its full-year forecast FFO growth of about 3 per cent with forecast FFO of 23.25¢ per security and forecast distribution of 21.3¢ per security.

David Jones and Myer's focus on its business through new store formats and more efficient buying, produced a rise in sales of 2.5 per cent for the September year. 

One of the newest stores is by David Jones, which opened its first boutique format store at Sydney's new Barangaroo precinct.   

David Jones chief executive John Dixon said it was the retailer's 42nd store, measuring just 1396 sq m.

"The boutique store provides customers with a bespoke offering curated specifically to suit people who work, live in, or visit the precinct. The offering includes popular brands from the David Jones' stable across fashion, accessories and beauty," Mr Dixon said.

"The store also features David Jones' new cafe concept, open from 7am on weekdays serving customers hot and cold beverages, breakfast and lunch. 

"Supplementing the boutique edit, Barangaroo customers will have access to David Jones' full collections through Click and Collect. This service will enable customers to shop online and collect from the store from 5pm on the same day when ordered before noon." 
 

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