Scentre Group Posts Record Sales and Strong Occupancy Amid Redevelopment Push
Scentre Group reports rising customer visits and record business partner sales, while advancing major Westfield redevelopments and reaffirming 2025 earnings guidance.
- Customer visitation up 2.3% to 179 million over 18 weeks
- Business partner sales rise 2.8% to $6.7 billion for Q1 2025
- Portfolio occupancy remains robust at 99.6%
- Westfield Bondi and Sydney redevelopments progressing
- Refinanced $1 billion subordinated notes with new $650 million issuance
Strong Foot Traffic and Sales Growth
Scentre Group (ASX: SCG) has delivered a solid operating update, highlighting a 2.3% increase in customer visits to its 42 Westfield destinations across Australia and New Zealand. Over the 18 weeks to 4 May 2025, foot traffic reached 179 million, reflecting growing consumer engagement with the retail portfolio.
Business partner sales for the quarter ended 31 March 2025 rose 2.8% to $6.7 billion, contributing to a record rolling 12-month sales figure of $29.1 billion. This performance underscores the resilience and appeal of the Westfield brand amid evolving retail dynamics.
Leasing and Occupancy Remain Robust
Demand for retail space remains strong, with portfolio occupancy at an impressive 99.6% as of 31 March 2025. The group completed 635 leasing deals in the quarter, achieving an average leasing spread of +2.1%. Specialty rent escalations averaged 4.4%, signaling healthy rental growth and landlord confidence.
Redevelopment Projects Gain Momentum
Significant progress continues on key redevelopment projects. At Westfield Bondi, the new Virgin Active fitness centre and rebel rCX concept store are set to open in June 2025, enhancing the lifestyle offering. Meanwhile, the expansion of Westfield Sydney’s luxury precinct is underway, with new brands scheduled to open progressively from May 2025.
Notably, Westfield Warringah has been declared a state significant development by the NSW Housing Delivery Authority, opening the door to up to 1,500 new dwellings. This designation accelerates planning processes and presents a strategic growth opportunity for Scentre Group.
Capital Management and Financial Outlook
In capital markets activity, Scentre Group completed the make-whole redemption of $1 billion in subordinated notes due 2026. This was refinanced with a new $650 million subordinated note maturing in 2031 at a margin of 2.0%, supplemented by $350 million of undrawn bank facilities, reflecting prudent balance sheet management.
CEO Elliott Rusanow reconfirmed the group’s guidance for 2025, targeting funds from operations (FFO) of 22.75 cents per security, representing 4.3% growth, alongside a 2.5% increase in distributions to 17.63 cents per security.
Acknowledging Community and Ongoing Inquest
The update also marked the somber one-year anniversary of the tragic attack at Westfield Bondi, where six lives were lost. Scentre Group extended condolences and continues to cooperate fully with the NSW State Coroner’s inquest, which commenced in late April 2025.
Bottom Line?
Scentre Group’s strong operational momentum and strategic developments position it well for sustained growth, though the impact of ongoing regulatory and community factors warrants close watch.
Questions in the middle?
- How will the Westfield Warringah development reshape Scentre Group’s growth trajectory?
- What are the potential financial and reputational impacts of the Westfield Bondi coroner’s inquest?
- Can specialty rent escalations and leasing spreads sustain momentum amid changing retail conditions?
