Scentre Group Posts 5% Sales Growth and Maintains 4% FFO Target in Q1 2026

Stronger Foot Traffic and Sales Across Westfield Portfolio

Scentre Group (ASX:SCG) kicked off 2026 with a solid operating update, reporting a 3.1% increase in customer visitation to its 42 Westfield destinations across Australia and New Zealand, reaching 160 million visits year-to-date through 19 April. This uptick translates to 4.9 million more visits than the same period last year, reflecting sustained consumer engagement despite ongoing economic headwinds.

The boost in foot traffic translated into tangible sales growth. Business partner sales for the three months to 31 March hit $7.0 billion, a 5.0% rise on the prior comparable period, with specialty sales slightly outperforming at 5.3%. All regions contributed to this growth, led by Western Australia’s 7.4% increase and solid gains in Queensland and South Australia. Fashion, health and beauty, and jewellery categories posted particularly strong sales, while footware and homewares lagged.

Leasing and Occupancy Near Peak Levels

Demand for space remains robust, with portfolio occupancy nudging up 20 basis points to 99.8% as of 31 March 2026, matching the highest levels seen in recent years. The group completed 636 leasing deals in the quarter, achieving average specialty releasing spreads of +3.3%, alongside specialty rent escalations of +5.3%. These metrics suggest landlords are successfully converting increased shopper interest into rental growth.

Meanwhile, redevelopment work continues on Westfield Bondi, where a $240 million project aims to reposition the centre as a premier lifestyle, entertainment, and dining hub. This aligns with Scentre’s broader strategy to deepen economic activity at its destinations, a theme echoed by CEO Elliott Rusanow, who noted that visitation and sales gains have been consistent across all regions.

Capital Moves Support Financial Flexibility

On the capital management front, Scentre Group settled a significant divestment in early February, selling a 19.9% stake in Westfield Sydney to Australian Retirement Trust (ART) for $864 million at a 4.69% capitalisation rate. This strategic partnership follows previous moves to optimise the portfolio’s joint venture structure and balance sheet.

In March, the group redeemed US$750 million (approximately $1.15 billion) of 2030 senior bonds through a make-whole redemption, reducing future interest expense. Shortly after, it issued a $750 million six-year senior note domestically with a credit margin of 1.20%, demonstrating continued access to favourable funding markets. Earlier, Scentre divested a $50 million interest in the Dexus-managed fund holding 25% of Westfield Chermside, further streamlining its investment footprint.

Guidance Maintained Amid Geopolitical Uncertainty

Reflecting the strong start to the year, Scentre Group reaffirmed its funds from operations (FFO) target of at least 23.73 cents per security for 2026, representing a 4.0% increase on the prior year. Distributions are also expected to rise by 4.0% to 18.43 cents per security. The group, however, remains cautious about the broader economic environment, acknowledging geopolitical volatility and its potential impact on consumer spending.

These results build on a foundation of steady growth, following a year in which the group recorded a 4.9% rise in FFO and a record 540 million customer visits across its portfolio, as detailed in its record 540M visits update earlier this year. The consistency in visitation and sales growth underscores the resilience of Scentre’s assets and its strategy to create destinations that attract more people, more often.