Scentre Group Posts 5% Sales Growth and Near-Perfect Occupancy in Q1 2026

Strong Sales and Leasing Momentum Across Westfield Portfolio

Scentre Group (ASX:SCG) kicked off 2026 with a solid operating update, reporting a 5.0% uplift in business partner sales to $7.0 billion for the first quarter. Specialty sales outpaced total sales, climbing 5.3%, while customer visitation to its 42 Westfield destinations in Australia and New Zealand rose 3.1% to 160 million visits year-to-date through April 19. This broad-based growth was seen across all regions, underscoring the group's strategy to enhance economic activity at each centre.

Leasing fundamentals remain robust, with portfolio occupancy nudging up 20 basis points to a near-perfect 99.8% as of March 31. The group completed 636 leasing deals, achieving average specialty releasing spreads of 3.3%, alongside specialty rent escalations averaging 5.3%. These figures reflect ongoing strong demand for retail space in prime locations, supported by rising consumer activity.

Capital Recycling and Debt Refinancing Drive Financial Flexibility

On the capital management front, Scentre Group continued to execute its strategy of recycling capital and managing its debt profile. In February, it settled the sale of a 19.9% stake in Westfield Sydney to Australian Retirement Trust (ART) for $864 million at a 4.69% capitalisation rate, a transaction that builds on the group's approach to joint ventures and third-party capital partnerships. This deal follows the earlier sale of a 25% Westfield Chermside stake to a Dexus-managed fund, from which Scentre divested its $50 million investment during the quarter.

In March, the group redeemed US$750 million of 2030 senior bonds via a make-whole redemption, reducing its offshore debt exposure. It then issued a $750 million six-year senior note in the Australian domestic market with a credit margin of 1.20%, reflecting favourable market conditions and supporting its financial flexibility. The redemption and new issuance are key steps in managing interest costs and debt maturity profiles amid ongoing economic uncertainties.

Westfield Bondi Redevelopment and Outlook Amid Geopolitical Uncertainty

Investment in enhancing customer experience remains a priority, with works progressing on a $240 million redevelopment at Westfield Bondi. The project aims to reposition the centre as a world-class lifestyle, entertainment, and dining destination, aligning with Scentre's ambition to create destinations that attract more frequent and longer visits.

Looking ahead, the group reaffirmed its full-year funds from operations (FFO) target of at least 23.73 cents per security, representing a 4.0% growth over 2025, and expects distributions to rise by the same 4.0% to 18.43 cents per security. However, CEO Elliott Rusanow acknowledged the risks posed by geopolitical volatility and its potential impact on consumer behaviour, signalling cautious optimism as the group monitors evolving conditions.

This update builds on Scentre's recent capital partnership with ART, reinforcing the group's active portfolio management and capital recycling strategy, which has been a key theme in its recent announcements.