Strategy

Scentre Group's strategy is to create extraordinary places connecting and enriching communities by owning, managing and developing the best retail assets in Australia and New Zealand

Asset Management

Own the highest quality shopping centres and focus on maximising the operating performance of centres via ongoing portfolio review and development of long term asset plans

Developments

Invest in the Group's centres at attractive total returns to ensure the assets continue to represent extraordinary retail spaces for retailers and shoppers

Capital Management

Focus on optimising cost of capital and maintaining conservatively positioned funding and liquidity

Retailer and Shopper Initiatives

Focus on the integration of food, fashion, leisure and entertainment experiences in each of its shopping centres to curate a retail environment that connects shoppers with our retail partners, goods and services that will resonate with the local community

Since the establishment of Scentre Group:

  • Asset Management - disposition of seven assets in Australia and New Zealand; introduction of joint venture partner into five assets in New Zealand; resulting in further improvement in operating metrics of the pre-eminent portfolio of shopping centres in Australia and New Zealand
  • Developments - the Group has commenced projects of $1.3bn, and has completed developments at Garden City, Miranda, Hurstville, Kotara, Chatswood and North Lakes (Stage 1) achieving IRRs of at least 15%. Future development pipeline in excess of $3bn
  • Capital Management - at 31 December 2015: gearing of 33.3% within target range of 30-35%; liquidity at $3.7bn; credit rating A1 (Stable) from Moody's and A (Stable) from Standard and Poors; weighted average debt maturity 5.6 years; interest cover 3.5 times
  • Retailer and Shopper initiatives - recently-opened developments featured new experiential precincts and offerings for shoppers. In-house digital advertising network successfully launched with 1,200 SmartScreens providing retail and brand partners with a sophisticated promotional channel for brands and offers

HIGHLIGHTS

  • Earnings – FFO of $1.199bn or 22.58 cents per security, representing growth of 3.8%, above previous market guidance of 3.5%.
    • Strong underlying operating performance has more than offset the FFO earnings impact of asset sales
    • Excluding the impact of transactions, underlying FFO increased by approximately 5%
  • Comparable NOI Growth of 2.6% above forecast range of 2.0 – 2.5%
  • Commenced $830m (SCG share $583m) of developments in 2015 with four openings at Chatswood, Hurstville, Kotara and North Lakes all trading well. In 2016 has already commenced $495m (SCG share $425m) of developments at Chermside and North Lakes Stage 2
  • Shopping centre valuations were $1.5bn higher, reflecting growth in shopping centre NOI, increase in value post completion of developments and capitalisation rates firming by 38bp to 5.57%
  • 2016 FFO forecast to increase by approximately 3% with distribution forecast to increase by 2% to 21.3 cents per security. Underlying earnings increase approximately 5% if full year impact of asset sales taken into account
Overview 12 months to 31 December 2015
Assets Under Management 1 $42.1bn
Profit $2,708m
Funds from Operations (FFO) $1,199m
FFO per security 22.58 cents
Distribution per security 20.90 cents
Return on Contributed Equity 4 11.4%
Comparable NOI Growth2 2.6%
Gearing 3 33.3%
Outlook 2016 Full Year Forecast
Funds from Operations Approximately 3% growth
Distribution per security 21.3 cents
2% growth
Comparable NOI growth 2.5 - 3.0%
  • 1. Assets under management at year end is pro forma post sale of 2 New Zealand assets
  • 2. Comparable NOI growth for the 12 months to December 2015 is pro forma post sale of four Australian assets and three New Zealand assets
  • 3. Pro forma post sale of two New Zealand assets, gearing would be 32.3%
  • 4. FFO/Contributed Equity

Our Operations

australia map
  • The portfolio remained in excess of 99.5% leased
  • 2.6% Comparable NOI Growth for the 12 months to 31 December
  • Comparable Specialty Retail Sales Growth of 5.3% in Australia to $10,826 psm, and 6.6% in New Zealand to NZ$12,117 psm
  • 17.8% Specialty Store Occupancy Cost

Portfolio Summary

As at 31 December 20151 Australia New Zealand Total 2
Centres 34 6 40
Number of Retail Outlets 10,693 977 11,670
Gross Lettable Area (m sqm) 3.3 0.3 3.6
SCG Interest (bn) 3 $28.9 NZ$1.3 $30.1
JV Partner Interests (bn) 3 $11.0 NZ$1.1 $12.0
Assets Under Management (bn) 3 $39.9 NZ$2.4 $42.1
Weighted Average Capitalisation Rate 5.51% 6.98% 5.57%

1. Pro forma post sale of two New Zealand assets
2. Period end exchange rate AUD/NZD 1.0665
3. Includes construction in progress and assets held for development

portfolio by gla1

portfolio by asset value (SCG share)1