Australian giant Scentre Group releases financials, confirms $790m Newmarket plans on track

Scentre Group redevelopment as it was last year. Photo/Michael Craig

ASX-listed shopping centre owner Scentre Group has released its annual result, reiterating costs and timing on Australasia's largest retail centre redevelopment which is in New Zealand.

Westfield Newmarket is the Auckland shopping centre where $790 million is being spent on rebuilding across two blocks between Broadway, Mortimer Pass, Clovernook Rd, Morrow St and Gillies Ave to create what Scentre is planning to be this country's most upmarket retail offering.

Scentre, which owns the Westfield-branded shopping malls, has a market capitalisation of A$21.3b, and is the 15th largest entity listed on the Australian share market. It is not listed on the NZX but it has large operations in this country.

It pushed up net operating income from A$1.8b for the December 21, 2017 year to A$1.9b for the year to December 31, 2018. Management income rose from A$45.1m to A$46.1m.

In its results presentation released to the ASX this morning, Scentre had a full page on Newmarket, reiterating the project cost of A$790m of which Scentre has a A$400m share because it owns the property jointly with Singaporean interests.

Scentre operates across 41 retails centres valued at A$53.4b. From those properties, about 11,500 retailers operate on more than 3.7m square metres of retail space. The business has total assets of A$39b and assets under management of A$54.2b.

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In the year to December 31, 2018, Scentre completed more than A$1.1b of work of which its own share was A$810m. Those were earning accretive and would deliver attractive long-term returns, the business said. They had added more than 106,000sq m to the portfolio at Westfield Plenty Valley in Melbourne, Westfield Carousel in Perth, Westfield Tea Tree Plaza in Adelaide, Westfield Kotara in Newcastle and Westfield Coomera on Queensland's Gold Coast. That last property was Scentre's first greenfield living centre, the business said.

"These developments elevated the customer experience, differentiated our product and service offering and enhanced our premium platform for our brand partners," it said.

"Scentre Group commenced the NZ$790 million (SCG share: NZ$400 million) redevelopment of Westfield Newmarket in Auckland during the period, which upon completion in late 2019 will create the leading lifestyle and fashion destination in New Zealand. Brand partner interest in the development is strong across all categories and leasing is well progressed," the business said in today's announcement.

Peter Allen, Scentre Sydney-based chief executive, said: "We are excited about the prospects for our business. We will continue to deliver on our purpose 'creating extraordinary places, connecting and enriching communities' ensuring we are a long-term
sustainable and responsible business for all our stakeholders."

Newmarket is by far Scentre's largest Australasian redevelopment. Scentre has stakes in five major shopping centres in New Zealand, making it the single largest operator of retail centres in New Zealand.

The redevelopment of the Newmarket mall which Aucklanders often call the 277 began in the first quarter of last year and is due to be completed in the final quarter of this year, Scentre's page said.

Once completed, the centre would be 88,150sq m, Scentre's presentation showed, with anchor tenants David Jones Farmers, Countdown, Event Cinemas and the creation of a new dining and leisure precinct.

About 230 new stores were being built, Scentre said. No announcements were made on leasing progress at Newmarket but already the Herald has reported how major Australian brand Zimmerman could open there, along with influential Bohemian-style Camilla, also headquartered in Australia.