New luxury brands are coming to Westfield Newmarket. Photo / supplied
New luxury brands are coming to Westfield Newmarket. Photo / supplied
ASX-listed Scentre Group, with a A$13.2b billion ($13.8b) market capitalisation, has declared a A$400.4 million half-year profit compared to a A$3.61b loss when it absorbed a big property portfolio valuation drop.
New Zealand's largest mall owner has its centres mostly shut, except for supermarket, petrol and pharmacy operations in alert level 4.
But today the owner declared its half-year profit to June 30, 2021 and chief executive Peter Allen told the Herald about plans still in place to expand two Auckland malls.
Work at Westfield Albany might start next year, adding "another supermarket and other stores", Allen said.
He is unsure of the timing for work to start on Scentre's long-standing plans to expand Westfield St Lukes in Sandringham: "We're working with them in terms of being able to right-size it. We have had lessons now in terms of Newmarket," he said referring to Scentre's $1b expansion of that lifestyle centre.
"Certainly in the first half of this year, New Zealand has done as well as South Australia, Western Australia and the ACC in terms of lockdowns so we're seeing really strong performances," Allen said, deliberately omitting to mention Victoria or New South Wales, hit by Covid lockdowns.
Scentre's smoothed measure of operating cash flow that excludes depreciation, amortization and gains on asset sales - funds from operations - rose by 28 per cent to A$463.4m.
Shareholders are forecast to get an annual A14cps dividend.
Scentre owns 51 per cent of Westfield centres at Albany, Newmarket, St Lukes, Manukau and Riccarton. The other 49 per cent is owned by a Singaporean government property investment fund.
Peter Allen, Scentre's Sydney-based chief executive, said: "Today's results are pleasing and demonstrate the resilience of our platform and ability to generate cash flow with operating profit up 28 per cent.
"We have delivered strong operating performance even with a number of government restrictions in place. In those locations impacted less by lockdowns, we have seen trading conditions better than those experienced in the first half of 2019," he said.
Scentre collected A$1.2b gross rent during the first half of 2021, up 37 per cent or A$325m compared to the first half of 2020.
"Visitation rapidly rebounded when restrictions were eased. Customers want to return to our Westfield Living Centres as what we offer is integral to their lives," Allen said, referring mainly to Australian malls which have suffered much longer lockdowns than New Zealand malls.
The expanded Westfield Newmarket: 51 per cent owned by Scentre Group. Photo / Dean Purcell
Annual sales at Westfield malls were A$23.4b.
Allen said Scentre was focused on long term growth, leveraging the strength of the core business by becoming essential to people, communities and the businesses that interact with them.
"We want to be the first choice for where people spend their time outside of home and work. All Westfield living centres have remained open during the period, operating with Covid safe protocols and in line with the latest health and government advice.
"We are facilitating community access to Covid-19 vaccinations across all of our Westfield centres. We are focused on our customer strategy and continue to make significant progress on our customer experience initiatives. This includes our membership program Westfield Plus which has more than 1.9 million members, increasing by 1.4 million since June last year," Allen said today.
Two years ago, Scentre managed the project to finish a $790m upgrade of Westfield Newmarket but it is yet to fully lease its show-case grand entranceway on the corner of Broadway and Mortimer Pass.
Last month, the Herald reported how Scentre planned to open Louis Vuitton, Saint Laurent, Balenciaga, Alexander McQueen, Moncler, Burberry, Jimmy Choo and Michael Kors at Westfield Newmarket.
Scentre Group said these international retailers would soon be trading from the property it calls a lifestyle centre.
In February this year, the Herald reported Scentre suffering a A$3.7 billion full-year loss after the value of its malls was heavily written down.
It suffered a statutory loss of A$3.7b for the year ending December 2020, due in large part to the A$4.2b hit to the value of its malls. The company said: "2020 reported sales and visitation have been impacted by the Covid pandemic which caused restrictions to trading during the year".
Scentre's A$25b of sales in 2019 fell to $22b in 2020, the results out last summer revealed.
Scentre's shares have been trading on the ASX around A$2.55, down from A$2.96 in March. The company is not listed on the NZX.
