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Scentre Group appoints Chief Financial OfficerScentre Group (ASX: SCG) today announced that Mr Andrew Clarke will become the Group’s Chief Financial Officer (CFO) effective 1 October 2022.Today’s announcement follows the announcement of Elliott Rusanow’s appointment as Chief Executive Officer, effective 1 October 2022.Mr Clarke is currently the Group’s Director of Finance and Capital Markets.CEO-Elect Elliott Rusanow said “Andrew has extensive finance experience together with a deep understanding of Scentre Group’s business that has been built over a 17-year career with Scentre Group and Westfield Group.“Andrew will play a key role in the delivery of our strategic goals.”CEO Peter Allen said: “Andrew’s appointment demonstrates the depth of the Group’s talent and succession planning. I am confident Elliott, Andrew and the senior leadership team will take advantage of the many opportunities ahead.”Andrew Clarke said: “I am honoured to be appointed CFO and look forward to working with Elliott and the Scentre Group team in achieving our growth ambition.”Authorised by the Chief Executive OfficerBiography:Andrew Clarke Andrew has over 20 years’ experience, including working across finance, real estate and capital markets in Australia, the United Kingdom, Europe and New Zealand.During a 17-year period at Westfield Group and Scentre Group, he has held a number of senior corporate roles. He is currently responsible for the Group’s finance, group planning, treasury, investor relations, corporate development and capital transactions, commercial retail management, energy and renewables functions.Andrew is the co-executive leader of the Group’s Responsible Business (ESG) strategy and the Chair of the Group’s Diversity, Equity and Inclusion Council. Andrew joined Westfield in 2005, working across all areas of the Australia and New Zealand business.In 2012, Andrew was appointed to the role of Chief Financial Officer for Westfield Australia and New Zealand. Following the establishment of Scentre Group, Andrew has performed a number of senior executive leadership roles.He has been a leader in a number of capital transactions during his career with Scentre Group and Westfield, these include the $1.5 billion sale of the Sydney Office towers, the joint venture partnership with GIC for the NZ$2.1 billion New Zealand portfolio, the restructure of $1.8 billion of Property Linked Notes and the divestment of four shopping centre assets for $780 million.Andrew has a Bachelor of Commerce (University of Victoria, New Zealand) and is a Chartered Accountant (Australia and New Zealand Institute of Chartered Accountant).

Scentre Group appoints Chief Financial Officer

Westfield Living Centres at the helm of luxury retail flagship boomCBD luxury retail has been the quiet achiever of the past two years.Despite the interruptions to overseas and domestic travel, luxury spending by Australian residents rose by 21 per cent for the year to March 2022, compared to March 2021 #, holding up the mirror to the value and strength of the domestic customer.More businesses are making their way to our shores and investing in expanding and optimising their physical store networks.Customer demand for world-class luxury retail experiences has never been more aligned to the appetite we’re seeing from brands to increase their presence and engage with our customers.For many of these brands, Australia and New Zealand presents a key opportunity for growth.Brands once placed emphasis on the inbound stream of overseas visitors.  Now, this is just the icing on the cake and where we’ll start to see this growth accelerate as international travel takes pace.The rise of luxury retail flagshipsWestfield Living Centres are the destination of choice for customers.We are successful at driving visitation in our strategic locations, which is why businesses want to maintain and grow their store networks with us so they can connect and engage with more customers.Our Living Centres are located in the heart of communities, close to where majority of the population live. In 2021, we had 413 million customer visits and annual sales through our platform were $22.1 billion despite the extended lockdowns in NSW, Victoria, ACT and Auckland.We’re seeing customer visits continue to grow across our portfolio and we are confident in the role our Living Centres play in attracting visitation to CBD areas.Our approach to the customer is based on the insight that we compete for their time and attention. Listening and responding to feedback is how we curate retail experiences that meets their interests and needs.It’s also how we deliver on Our Purpose, Our Plan and Our Ambition to grow by becoming essential to people, communities and the businesses that interact with them.Over the past 2 years, our luxury retail portfolio has grown exponentially, now made up of 76 stores, representing 22 brands across Australia and New Zealand.When restrictions eased in New Zealand last year, we launched a new luxury precinct featuring 12 new stores, from Louis Vuitton, Gucci, Moncler, Balenciaga to Alexander McQueen, Burberry and more.Many of these brands are first to market, with Westfield Newmarket expected to be their only representation in the country.The response from the Auckland and broader New Zealand customer has been significant and it’s pleasing to see other brands taking notice. Versace and others will arrive later this year.At Westfield Sydney, we’ve introduced an ensemble of leading brands, including luxury watch and fine jewellery retailer Piaget, Jimmy Choo and Versace will open imminently. We are also fielding demand from many other brands looking to enter the Australian market.The access and ability to form connections with our customers has also motivated our existing brand partners to start thinking differently.Brands are responding to the demand we’re seeing for luxury experiences in our suburban Living Centres, including in New South Wales and Western Australia.They’re also investing heavily in rightsizing and refurbishing their existing flagship stores to bring the latest concepts and formats from around the globe, to Australia and New Zealand.Not long-ago customers would travel overseas to purchase a current season product. Now our partners see the value in expanding their store footprints so they can deliver the same, elevated experiences and ultimately house more product.The transformation of Gucci at Westfield Sydney is a good example of this. We supported the expansion of its flagship store from a single level to a 1,000 sqm two-level boutique featuring ‘bespoke client zones’ for exclusive shopping experiences.We’ve also supported Bottega Veneta, Balenciaga and Chanel with their own optimisation strategies, with works at Celine already underway and Fendi to commence early next year.Westfield Sydney at the heart of the CBD luxury precinct evolutionLooking more broadly at the Sydney CBD luxury experience it’s hard not to notice the evolution of the precinct and the significant role Westfield Sydney plays in that.Just like Canton Road in Hong Kong and the Miami Designer District, Westfield Sydney is considered a world-class luxury retail destination in its own right - best known for its diverse apparel, shoes and accessories offer.No other location in the Sydney CBD offers the extensive mix of luxury brands and experiences that Westfield Sydney delivers.As more office workers and visitors return to the CBD and with greater focus from government, industry and the private sector to revitalise the broader precinct, we’re feeling very optimistic about the long-term future of the CBD.Customers are enjoying being back in our centres and we’re also seeing a growing appetite for physical retail experiences. We expect this to continue.Together with our joint venture partner Cbus Property, we are investing in the redevelopment of 101 Castlereagh Street, which includes the expansion of Westfield Sydney – taking the centre from two to three interconnected buildings.The investment will enable us to create the next horizon of our flagship Living Centre. It will become a destination thriving off the 24-hr economy, where retail, residential and commercial combine.We’re looking forward to taking our customers, community, and business partners on the journey with us.As seen in 2022 Shopping Centre News CBD Guns issue# CBAiQ

Westfield Living Centres at the helm of luxury retail flagship boom

2022 AGM CEO addressHELD ON THURSDAY, 7 APRIL 2022 AT 10:00AMThank you Chairman. Welcome and good morning everyone.Thank you for participating in today’s AGM.I am very pleased to report on the Group’s performance and the team’s delivery of our 2021 results.Last year once again highlights the important role we play in our community and economy.I would like to thank the whole of our Scentre Group team for being proactive and decisive in supporting our customers, communities, business partners, people and securityholders.We have been agile in our customer focussed strategy to drive visitation to our Westfield Living Centres and are seeing more customers spending their time and money in our centres.Notwithstanding more government restrictions than the previous year, we achieved 413 million customer visits.We have remained focused on our customers, leveraging the strengths of our leading platform and pursuing Our Ambition to grow by becoming essential to people, communities and the businesses that interact with them.As a result we saw our business deliver stronger results in 2021 with Operating Profit being $846 million, an increase of 10.9% over 2020.Funds from Operations grew by 12.7% to $863 million.Gross cash rental collections for the year were $2.3 billion, representing an increase of approximately $200 million compared to 2020.Our net operating cash flow was $914 million, up 24.8% compared to 2020.Our team’s actions have delivered financial returns that have enabled us to deliver a distribution of 14.25 cents per security for the year, exceeding guidance.We continue to drive strong demand for space in our Westfield Living Centres from existing and new businesses who are focused on growing their customer engagement and optimising their most productive stores with us.Leasing deal activity has been strong and as a result, occupancy increased to 98.7%.During 2021 we made significant progress on customer initiatives that create opportunities to expand and enhance our platform.We launched Westfield Direct, our aggregated click and collect service, across our Australian Westfield Living Centres, as an extension of our in-centre experience. It means our customers can experience Westfield, wherever they are. Westfield Plus, our membership platform grew in 2021 and now totals more than 2.4 million members.The combination of these two initiatives provides us with opportunities to learn more about our customer and continue to deliver what they want.This focus on customers is integral to our $4.5 billion development pipeline, creating destinations that meet the future needs of people and communities.We have continued to make progress on our approach as a responsible, sustainable business across the four pillars of people, community, environment and economic performance.The Group is committed to gender equity. At year-end, we had 45% female representation across all levels of management. We have pay equity for like roles by gender.For our community, the highlight is the ongoing positive impact of our Westfield Local Heroes program, which has now entered its fifth year. Since inception, the Group has donated approximately $5 million to the grassroots organisations represented by our successful Westfield Local Heroes. The key areas of support over this time have included disability and access, family and youth support, domestic violence, welfare services and homelessness, together with mental health and wellbeing.We are working with our joint venture partners to expand our net zero emissions target for scope 1 and 2 by 2030, to be across our whole portfolio. Currently our net zero target is across those centres we own outright. We are making great progress on this with energy utilisation reduced by 30% since Scentre Group was formed. During 2021, we finalised our Net Zero Pathway outlining our continued approach to reduce energy and emissions. We have been pleased to work with some of our business partners to support them in achieving their environmental targets by providing renewable electricity across their store networks.This year we are working on our roadmap to reduce waste and water usage. Our teams continue to focus on recycling and water initiatives across our portfolio. We released our Modern Slavery Statement alongside our Responsible Business Report in mid March. It outlines the progress we are making to identify and address the risk of modern slavery occurring in our operations and supply chain.During the year we refreshed our strategy and developed Our Ambition to outline how we will pursue growth and become essential to people, communities and the businesses that interact with them. Our team is focused on growth.We have learnt over the past two years that the pandemic impact to our business is temporary and not structural. Our customers want to spend time at our centres which in turn drives demand from our business partners to have access to these customers. Any rationale for Government imposed restrictions regarding lease obligations no longer exists and we expect governments to end their mandating of our securityholders funding support to other businesses.We are confident that the Group is well positioned to benefit from the continued strength of the consumer and the economic recovery across Australia and New Zealand. In our first quarter of 2022, we have collected approximately $600 million in rent.Subject to no material change in conditions, the Group expects to distribute at least 15.0 cents per security for 2022, representing at least 5.3% growth. Operating earnings are expected to grow at a higher rate in 2022.I would like to thank the Board for their continued support and guidance, not only for the last year but for the nearly 8 years I have been CEO of Scentre Group. It’s been a privilege to serve as the Group’s first CEO, establishing our strong culture and supporting a dedicated and highly aligned results driven team.As this is my last AGM, I would like to thank you, our securityholders for your ongoing support of Scentre Group. I look forward to the Group’s continued success as it pursues its growth ambition.I will now hand back to the Chairman.

2022 AGM CEO address

2022 AGM Chair&#39;s addressHELD ON THURSDAY, 7 APRIL 2022 AT 10:00AMGood morning fellow securityholders and guests.On behalf of the Board of Scentre Group, I welcome you and thank you for participating in today’s AGM.The Group has remained focused on Our Purpose throughout another COVID-19 interrupted year.Operating profit and distribution have increased this year and I want to thank our team for delivering these results, even with more COVID-19 restrictions than 2020.This demonstrates our proactive approach to generating long-term value for our securityholders.Our CEO Peter Allen will address our operating and financial performance shortly.The past year has reinforced how essential our Westfield Living Centres are to people and communities.We are very proud of our team, particularly how they kept adapting to the changing conditions, keeping our centres open and safe.Since Scentre Group was established in 2014, we have focused on our people and creating a strong operational culture where talent can thrive.As part of this, we are committed to fostering an inclusive workplace where diversity of perspectives and “speaking up” is highly valued. Despite this COVID interrupted year, the Group maintained its focus on measuring our employee engagement, which has remained very high at 85%. This places us in the top 5% of companies globally.We have continued to increase female representation at all levels of the organisation and are well positioned to achieve our goal of 40:40:20 across the Group’s workplace by 2025. We retained 94% of our key talent in 2021, against a target of 90%. This was pleasing given the competitive labour market conditions we are facing.Our people and culture are a very significant part of our approach to being a responsible, sustainable business, along with our community, environmental and economic performance.In mid-March, we released our 2021 Responsible Business Report detailing the progress we have made across the four pillars just mentioned. We also released our second Modern Slavery Statement. The Board maintains oversight of the Group’s climate risk and resilience strategy.It is pleasing to report that we have already reduced our emissions by 30% since the Group was established in 2014. This stands us in good stead to achieve our net zero emissions target by 2030 across our wholly-owned portfolio.I commend our team’s continued focus on further integrating responsible business objectives into our business.We have done a lot of work in addressing last year’s vote against our 2020 Remuneration Report. In recent months, we have met with major securityholders and proxy advisers. We appreciate their preparedness to meet with us – some multiple times.We have listened and made adjustments, in particular, to the measurement criteria and outcomes under the short-term variable remuneration and long-term variable remuneration plans.Based on these recent discussions we are pleased to have received securityholder and proxy adviser support for this year’s Remuneration Report.Andrew Harmos, our Chair of the Human Resources Committee is with us today. I would like to thank Andrew for his absolute focus and commitment.Each year the Board, with the assistance of the Nomination Committee, completes a review of its performance. The outcome of this year’s review was very positive and has informed the overall work of the Board and committees.It has been a significant year for succession planning for the Board and management.We are committed to continuing to ensure that we appoint directors with an appropriate mix of skills, knowledge, experience and diversity.Recently the focus has been on addressing succession in leadership of Board committees as well as the Board’s overall gender balance. Currently 40% of Board members are female.During the year we were very pleased to welcome Ilana Atlas to the Board. Catherine Brenner joined the Board on 1 March 2022. Both Ilana and Catherine stand for election today with the full support of the Board.Mike Ihlein and I are offering ourselves for re-election with the full support of our fellow Directors. Steven Leigh has announced his retirement from the Board and on behalf of the Directors I extend my thanks to him for his valuable contribution to Scentre Group and respect his decision to focus on other aspects of his non-executive career. We wish Steve well in his future endeavours.The Board has continually been focused on succession planning at a management level.After a comprehensive global search we were delighted to announce our Chief Financial Officer Elliott Rusanow as Peter Allen’s successor. This follows Peter’s decision to step down as CEO on 30 September this year after eight years as our inaugural CEO.I will make further remarks later in the meeting to acknowledge Peter’s extraordinary contribution to our business given this will be his last AGM with us as CEO.On behalf of your Board, we remain confident about the underlying strength of the consumer and the economic recovery across Australia and New Zealand.Our business is well positioned to fulfil Our Ambition to grow, supporting our customers and continuing to deliver long-term growth for our securityholders.I thank my fellow Directors and the Scentre Group team for their valuable contribution and support in what has been a challenging year.Thank you for your continued support of Scentre Group. I would now like to introduce our CEO Peter Allen to deliver his address.

2022 AGM Chair's address

A Message from our CEOToday, our CEO Peter Allen gave the following address at our 2020 Annual General Meeting.Thank you Chairman, and good morning everyone.I too would like to thank those securityholders for their flexibility as we manage our communication and engagement with you during this exceptional period.I would also like to thank our team who have remained focused and resilient throughout what is still a very difficult period.As the Chairman noted, our 2019 financial performance was reported to the market on 18 February 2020.
Our 2019 results demonstrated our customer-focused strategy was delivering results.Annual customer visits across our portfolio of 42 Westfield Living Centres in Australia and New Zealand was up 12 million to 548 million customer visits in 2019. In-store sales on our platform exceeded $25 billion and continued to grow during 2019. More than 7.5% of total retail sales in Australia take place in our Westfield Living Centres.Despite strong operating results in January and February, our business context and operating environment has shifted as a result of the reactions to the COVID-19 pandemic.Importantly, all our 42 Westfield centres remain open within Government guidelines in Australia and New Zealand.Due to the health measures and business trading restrictions, our centres look and feel very different to what they did in early March.Some of our retailers have been required to close to meet government requirements and unfortunately some have voluntarily decided to close.We estimate across our Australian portfolio today, approximately 39% of stores are open and in New Zealand, only designated essential retailers are open.As we stated in our recently released 2019 Responsible Business Report which is available online – our centres are regarded as social infrastructure.The Australian Government regards us as ‘public transient places’ and ‘essential activities’.This is because our Westfield centres include supermarkets, grocery stores, food markets, retail stores and medical centres.We acknowledge it remains a very difficult period for our business and many of our retail partners.We continue to work our way through the economic shock with our retailers and their banks, in particular, our small to medium sized retailers or ‘mum and dad’ retailers who are most vulnerable.As the Chairman mentioned in his address, we as members of the Shopping Centre Council have been working co-operatively and constructively with national retail groups to put forward to government a Small Business Retail Leasing Code of Conduct to help our industry respond with cashflow support with a targeted focus on those businesses who are most in need.I am pleased to note that the code we negotiated with the national retail groups will be adopted in principle and is to be legislated by Australia’s various States and Territories.Importantly the Code retains our ability to negotiate commercial outcomes with our SME retail partners on a case-by-case basis whilst balancing a fair and proportionate response.It aligns with our objective to balance the needs and responsibilities we have to a range of stakeholder groups – our customers, our brand and retail partners, our people and, of course, our securityholders.Scentre Group will immediately adopt the Code principles and look to implement similar arrangements in New Zealand for affected small business retailers.We are extremely conscious of our broader community responsibility as a leading Australian company and brand.It is going to take some time for us to work through our conversations with all our SME retail partners but rest assured we will do it with the empathy the community expects of us to come to a suitable commercial agreement and continue to foster our relationships with our retail partners.We have communicated regularly with our stakeholders on how we are responding to the pandemic. Media statements are released onto our website to ensure our position is transparent and we contribute to a balanced conversation during this period.Our team receives regular updates. We are very proud of their resilience in the face of such challenging times. We are focussed on maintaining to the greatest possible extent the employment of our people.I would like to thank all members of the Scentre Group team for their efforts especially during these early months of 2020.In particular I would like to express my thanks to our people in leasing, customer relations and finance who are having very difficult and understandably emotional conversations with small retailers.I also want to express my thanks to our customer experience teams for their extraordinary capacity to adapt to health and hygiene precautions and support our customers and retailers through this period of social and physical distancing.I would like to acknowledge our New Zealand teams who were required to adjust much more rapidly to stricter trading conditions as a result of the level 4 COVID-19 Alert.Our centre based and support office teams who are in roles that can be performed from home are working remotely and will do so for the foreseeable future and in line with health advice and government measures.
I would like to acknowledge and thank the Board for their support and guidance to the senior management team during 2019 and in particular, these times.I am very encouraged to see a collaborative effort across our team to bring the future forward by setting up a new drive-through Click and Collect service called Westfield Direct.We have launched this across all Australian Westfield centres providing another opportunity for our retail partners to connect with the customer.Our team developed the technological and operational platforms in under two weeks demonstrating business agility and innovation in the most challenging of times to deliver for our customers and retail partners.
We are now supporting over 200 restaurant and cafe brands to get their product to customers in as easy and safe a manner as possible.A further 100 fresh food partners expect to join Westfield Direct in coming days and we are working on expanding beyond food to other product categories.We are looking forward to this service developing further. I would encourage you all to try this out and order and pick up from your local Westfield centre. Details are on your local Westfield website.The last month has been an exceptional period in the life of our nation, our industry and Group. It is worth noting it has followed a bushfire emergency which impacted on significant parts of Australia during late 2019 and early 2020.Whilst the bushfires did not directly impact our assets, we were very pleased as a leading Australian company to support The Salvation Army during this period and donate $500,000 cash and provide significant in-kind support to them. We look forward to more engagement with the Salvos throughout 2020.We are a responsible, sustainable business and are continuing to approach these challenges and our business with Our Purpose front of mind – ‘creating extraordinary places, connecting and enriching communities’.

A Message from our CEO

Data leads retail&#39;s hybrid futureThis article was originally published in the Australian Financial Review.According to the OECD’s most recent Consumer Confidence Index, Australian consumer confidence has taken a hit in the past six months.This is no surprise considering the downturn basically coincides with the arrival of Covid’s Delta strain to our shores earlier this year and the subsequent rolling lockdowns.Yet while confidence has taken a dip, the OECD figures reveal Australians remain relatively sanguine about our economic future. The numbers were mirrored by Commonwealth Bank Credit &amp; Debit card spending data up to mid-September, as they highlight how lockdowns are detrimental to physical stores and a boom for online retail.The big question for retailers, however, is whether the pandemic has changed retail forever? Are we going to see the decline of the physical store? The short answer is no. In fact, what the pandemic has done is provide businesses with an opportunity to really hone their retail offerings by utilising the power of data to hasten a whole new era of digital innovation.Chief Executive of CommBank iQ, Ben Ashton, agrees the pandemic has accelerated the digital journey for many retailers and senior executives are “now open to a whole range of initiatives that are driven by data”.
He says consumers have experienced the best and worst of e-commerce over the past 18 months and they’ve learned to seek out the best digital experiences.“Data is simply a summary of human behaviour and Commonwealth Bank transaction data provides extraordinary insights into what Australians want, need and how they consume,” Ashton says.
By analysing that data, CommBank iQ can assist retail clients develop future strategies to improve outcomes for their customers, he says.For consumers, that future is simply about “getting better products and services more efficiently and with less waste”. On one level consumers are searching for the best digital experiences but they also hanker to return to stores and Ashton believes consumers are looking for a “blended mix of digital as well as bricks and mortar”.Wonderful lensScentre Group’s Director of Strategic Analytics &amp; Insights, David Lamond, says while transaction data provides a “wonderful lens on people’s behaviours”, it’s not much use unless it’s used as a tool for listening and understanding customers.He says data is part of a toolkit where you’re “using everything you can to help learn about customers and what they want and turning that into improvements to every aspect of the customer experience”. And for Scentre Group, it’s about taking those learnings and sharing them with their business partners (retailers).Lamond says Covid hasn’t so much changed the retail experience as it has interrupted its evolution when it comes to how consumers like to gather in shopping centres and share a sense of community.“I don’t think it has created a structural change,” Lamond says.“Throughout the pandemic we did primary research to try and understand people and what they wanted to do. What we discovered is people want to come back into centres as soon as possible.“And that’s precisely what they did. As soon as restrictions lift, people come straight back and that’s been the pattern in every state because people want to connect with each other,” Lamond says.Secret sauceAs for understanding what the future “secret sauce” of a good retail experience contains, Lamond says it will be a blend of bricks and mortar and online with “physical stores still at the heart of that ecosystem”.“Interestingly, what we’ve learned through the pandemic is the brands that are continuing to win are the ones who have invested in really good physical store networks,” Lamond says.Bearing this in mind, he says what the data has shown is brands wanting to grow their online sales need to have a strong physical store presence and this presence works best if the stores are in large centres such as Westfield. Lamond says the data does indicate online customer numbers double for a retailer if they have a store in a Westfield compared to not having a physical store.Moreover, Scentre Group have worked closely with CommBank iQ to better understand the interaction between the physical world and the online world and based on analysis of billions of transactions “you are twelve times more likely to make an online purchase in a fashion brand this week if you’ve been exposed to the physical store in the last week”.The challenge for Scentre Group is to ensure they assist their retail partners to build out the most productive physical store network and that’s where data has another huge role to play as the retail property giant endeavours to better connect with customers by bringing each centre to life.Ashton says there are a range of initiatives designed to build better connections with customers and they’re all based on a deep dive into consumer data. For example, data is used to formulate marketing offers as well as design better centre layouts with tenants located where they generate most value for all. It’s also being used to optimise the convergence of the physical and online shopping experience.According to Lamond, a good example of data usage is Scentre Group gathers over 300,000 pieces of feedback from customers every year about their retail experiences and the group applies machine learning to try and understand the big themes behind what customers want and “we set ourselves KPIs to act on that data”.A new aggregated click and collect platform soon to launch in Australia - Westfield Direct - will provide more opportunities for data analysis and a deeper understanding of customer needs.As for how data will continue to drive the evolution of retail, Ashton says: “We’ll see things like dynamic pricing, cross-selling opportunities and enabling customers to view stock levels inside stores before they arrive.”
Importantly, this rich flow of data is completely de-identified and aggregated as consumers “expect the highest levels of trust and governance in privacy,” Ashton says.It’s all about increasing the efficiency of the shopping experience for consumers and assisting CommBank iQ customers such as Scentre Group achieve this goal.“We have the deepest and richest data set and the best AI and data science talent and it’s a combination of those two things that enables us to provide unrivalled insights and data support tools to our customers,” Ashton says.“We’re able to identify the reasons why individuals come to a centre, work with the data to make the centre experience more attractive for customers so they stay longer, spend more and ultimately become better customers for the centre and retailers,” Ashton concludes.Sponsored by CBA

Data leads retail's hybrid future

2021 AGM Chairman addressGood morning fellow securityholders and guests.On behalf of the Board of Scentre Group, thank you for participating in today’s online AGM.
I hope you and your families remain safe and well.We appreciate your understanding as we continue to consider the COVID-19 pandemic in planning events.Needless to say 2020 was a disrupted year.Despite this we were proactive and decisive in supporting our customers, our retail partners and our people and in enhancing long-term value for securityholders.The Board was actively engaged with management in overseeing our response to the challenging operating environment.We met frequently during the year - 23 times as compared to the 10 meetings originally scheduled for the period.Committees including Human Resources, Audit and Risk and Nomination also met more frequently to consider key impacts and decisions.We are proud of our people and their ability to remain agile and focused throughout the period. We thank them for their efforts and contribution.Our priority was to ensure our customers, retail partners and our people remained safe, connected and engaged throughout a period that was challenging on multiple fronts.Unfortunately, some of our people were impacted by redundancy, stand-by or reduced hours as part of our cost reduction measures.Despite this our employee engagement remains strong when one considers key talent retention, low levels of voluntary turnover, high candidate Net Promoter Score and exit data which confirms that more than 96 per cent of our people would recommend Scentre Group as an employer.Throughout the year, we played a leadership role in our industry through the Shopping Centre Council of Australia of which Peter is Chairman to support government engagement and public policy development.We focused our case-by-case support on those that most needed our help which were our small to medium sized or ‘mum and dad’ retail partners.We did not claim or receive any financial support from the Australian or New Zealand governments including the JobKeeper program.Our ability to make decisions through the cycle has underpinned investor confidence and support from debt capital markets when we needed it.We acted quickly to secure additional funding, ensuring we were in a strong financial position to see the Group through and beyond the volatile period.Our capital management actions were focused on preserving value for the long-term and we did not seek equity from our securityholders.Our long-term objective to create sustainable returns for our securityholders is consistent with our approach to being a responsible, sustainable business.During 2020, we announced our target to achieve net zero carbon emissions by 2030 and committed to the Task Force for Climate-related Financial Disclosures.Our standalone Responsible Business Report and our first Modern Slavery Statement were released on the 31st of March 2021 and are available online.The Board and the Human Resources Committee, chaired by Andrew Harmos, has invested much time on the topic of remuneration.While the poll on the remuneration report for item 2 has not yet been taken, based on proxy votes already received, we expect a substantial vote against it.We are disappointed given the time and focus the Board devoted to these important issues on your behalf and the consideration we have given to the outcomes the Group and management delivered in the most uncertain and complex operating environment.I would like to make some comments on how, as you would expect, the Board exercised judgement and addressed the issues raised.There has been a very substantial reduction in earnings for our team.The fixed remuneration for senior management and base Board fees were reduced by 20 per cent at the height of the pandemic and remained at that reduced level for three months. No increases were given to management, in fact, our CEO has not had an increase since taking on the role in 2014.The short-term at risk remuneration reduced substantially for senior management and the long term at risk remuneration for the years relating to 2018, 2019 and 2020 lapsed. That is, there will be zero payouts for those three years, thereby eliminating our long-term retention strategy.Our existing remuneration structure was not designed to cater for the unprecedented circumstances we faced.
The Board considered the changing operating environment and exercised its judgement to build a remuneration structure for 2020 that responded and allowed us to adapt to the continuing complexity and uncertainty.Key to our ongoing success is attracting and retaining high-performing people and retention is a key element of our long-term at risk remuneration plan.Given the loss of our retention strategy, the Board determined it was in the best interests of securityholders to mitigate the risk of losing our very well credentialled key senior executives during very different times and to retain the best management team to lead our business through this uncertain period and beyond.We have spent a lot of time talking with many of our major investors and they understand the issues we faced during this unprecedented period and the complexity of the issues the Board needed to consider in determining our approach. The Board believes we appropriately responded to the circumstances and achieved the best outcome for the Group and you, its investors, with this pandemic specific remuneration structure.As a result, and as announced to the ASX in September 2020, the Board made a one-off issue of equity-based retention awards to members of the senior leadership team, including the CEO and CFO, whose services are integral to the Group’s response to the pandemic and beyond, steering a course through recovery and accelerating initiatives to support future growth.These awards will vest in the next two to three years subject to executives remaining and achieving individual performance requirements.These awards were not intended as, and did not come close to, compensating executives for the zero vesting of three years of long term awards – and they serve a different purpose to the short term at risk remuneration which is intended to recognise current year performance and outcomes.The Board remains committed to regular and critical review of our remuneration philosophy and framework on an ongoing basis and as such, has considered a number of factors when determining FY21 long term at risk remuneration hurdles.For FY21, we have retained a reduced ROCE hurdle of 50% and introduced a relative total shareholder return hurdle (30%) and a strategic measure hurdle (20%).We will continue to review the LTAR hurdles as the economic recovery continues to ensure STAR and LTAR continue to meet our remuneration principles.We value the views of our securityholders and the Board will consider all investor feedback as we make our decisions in 2021.The Board is committed to continuing to ensure that we appoint directors with an appropriate mix of skills, knowledge, experience and diversity, including gender.We are in the process of addressing further representation of women on our Board and hope to be in a position in the first half of the year to make a further appointment.During the year we were pleased to welcome Michael Wilkins and Guy Russo to the Board. Carolyn Kay and Margie Seale are standing for re-election and Guy Russo will stand for election, all with the full support of the Board.In addition to Board succession, there is a substantial process underway including external advisers to assist us with assessing and further developing the skills of our people to ensure that when the time is right, we have appropriate senior management succession in place including looking outside the organisation.Thank you for your continued support of Scentre Group.

2021 AGM Chairman address

2021 AGM CEO addressThank you Chairman. And good morning everyone.I too would like to thank securityholders for participating in today’s hybrid AGM.I would especially like to thank our people for their commitment to our customers throughout a disrupted year, and for their contribution to our results.I am very proud of our team, particularly how we kept adapting to the conditions, keeping our centres safe and open for the communities we serve. We continue to remain flexible.The restrictions imposed by governments during 2020 to address COVID–19 made for an unprecedented operating environment.Our team remained focused on balancing the health and safety of our customers, retail partners and people with business continuity and economic activity.We are pleased that all our 42 Westfield Living Centres remained open, safe and trading during the year despite these restrictions.We had more than 450 million customer visits across our portfolio, including an average of 46 million per month for the last quarter, highlighting how important our centres are to our customers and communities.This scale of visitation and average dwell time of more than one and a half hours demonstrates that our Westfield Living Centres are a ‘third place’ for our customers after their home and workplace.It also reflects the currency of our customer strategy and Our Plan to create the places more people choose to come, more often, for longer.During the year, leadership of the industry and of our company remained a priority.We were proactive and deliberate in the decisions we made with a view not just to the short term, but the long-term ramifications of those decisions.Our capital management measures were focused on strengthening the Group’s financial position and preserving value for the long term for our securityholders by not raising dilutive equity.The Group executed $10.1 billion of new and extended funding, including $3.6 billion of bank facilities, $2.4 billion of long-term bonds and $4.1 billion of subordinated notes. The subordinated hybrid notes issue was complex and has been viewed as unique and extremely innovative by the market.As a result of these actions, we have available liquidity of over $6 billion, sufficient to cover all debt maturities to early 2024.We maintain an “A” grade credit rating from all three ratings agencies.Cash collection has been a priority for our team.We achieved gross operating cash flows of $2.3 billion and net operating cashflows grew by 95.7 per cent in the second half of 2020, resulting in a cash surplus of $771 million for the 12-month period.Cashflow momentum has continued into 2021 with gross rental cash inflow for the 3 months to 31 March being in excess of $600 million.Operating Profit and FFO for 2020 were approximately $765 million or 14.7 cents per security. This included a credit charge of $304 million relating to the financial impact of the pandemic.Importantly, we did not seek or receive funds from the Australian or New Zealand government including under its JobKeeper scheme.All suppliers continued to be paid on 30-day terms to ensure their cash flow, consistent with our commitment to the Australian Supplier Payment Code.Supporting our retail partners was a key focus for the team during the year, particularly our small to medium sized retailers – or SMEs - who bore the brunt of the cashflow shock with limited access to other capital.We reached commercial arrangements with 3,398 retail partners including 2,456 SME retailers in line with the Code of Conduct.Throughout the year, we saw continued demand for space by our retail partners with occupancy at 98.5 per cent. We introduced 217 new retail brands to Westfield across all categories.Notably, the structure of our leases has not changed and remains based on the mutual agreement to pay a fixed base rent, a position fully supported by our debt and equity investors who do not want to see us take on retailer risk.Notwithstanding the turbulence during 2020, we continued to evolve the Westfield ecosystem, creating new opportunities for interaction between Scentre Group, our customers, and our retail partners and brands.
We have a solid platform with approximately 20 million people living in close proximity to a Westfield Living Centre.We seized the opportunity to introduce and progress strategic initiatives during the year including Westfield Direct and Westfield Plus.Westfield Plus is our membership program and we now have approximately 1.5 million members. This provides the opportunity to engage more personally with our customers.To support our retail partners through the height of the pandemic, we trialled Westfield Direct, a new drive-through, contactless click and collect service.These initiatives have positioned us to accelerate growth as consumer confidence continues to pick up.
The most successful retailers are multichannel retailers with productive physical store networks.Our Westfield Living Centres remain a central part of their business strategies given the quality of our centres and their proximity to customers.We continue to invest in our portfolio and during the year completed a number of developments including a new dining precinct at Westfield Doncaster in Melbourne, introducing 14 new restaurants to the centre.In December 2020, we were appointed by Cbus Property to design and construct the residential and commercial tower on the site of the former David Jones menswear store on the corner of Market and Castlereagh streets in Sydney’s CBD.These outcomes were achieved while the Group also maintained its focus on being a responsible, sustainable business and delivering on key initiatives across our four pillars of community, people, environment and economic performance.Community engagement with our Westfield Local Heroes community grants and recognition program continues to grow with more than 140,000 people voting for our 2020 Heroes. Over the past three years, we have granted $3.62 million to programs that directly benefit local communities.Our diversity and inclusion strategy continues to be a key driver of our culture and we’re proud of our inclusion in the Bloomberg Gender-Equality Index for the second year running as well as continued recognition as an Employer of Choice by the Workplace Gender Equality Agency and Silver status in the Australian Workplace Equality Index Awards.On the environment, we announced our net zero emissions by 2030 target and have established a roadmap to inform initiatives. We reduced our energy use by 10 per cent year-on-year, of which 4 per cent was continued asset operational efficiency. We publicly supported the Taskforce for Climate-related Financial Disclosures recommendations in 2020 and our climate resilience approach and reporting against the TCFD continues to improve. It was pleasing to improve our performance in key investor surveys, CDP and GRESB.Highlights of our financial performance were referenced earlier, noting it has been a trademark of our leadership team to balance short-term responses with long-term consequences for the business. Supply chains have also been a key focus throughout the year as we developed our first Modern Slavery Statement to assess and address risks in our direct operations and supply chain.Both our Responsible Business Report and Modern Slavery Statement were released on the 31st of March and are available online.Whilst COVID-19 uncertainty remains in 2021, subject to no material change in conditions, the Group expects to distribute at least 14.00 cents per security for 2021.The Distribution is expected to continue to grow in future years. The Group plans to retain earnings to cover operating and leasing capital expenditure, fund strategic initiatives and reduce net debt.What we learnt from last year is that regardless of the economic cycle, we must keep moving and innovating to deliver the most efficient platform for our partners to connect with customers.We operate a business that is unparalleled in terms of scale and proximity to where people live and work. This is our competitive advantage.We have a number of strategic initiatives underway that will drive our customer strategy in 2021 and beyond, delivering on Our Purpose – creating extraordinary places, connecting and enriching communities.
We believe Scentre Group is well positioned to deliver long term growth for securityholders.

2021 AGM CEO address

Our CEO Peter Allen on leading with a responsible business mindsetFaced with the COVID-19 pandemic disruption of 2020, we were steadfast in leading our business with a responsible business mindset. It helped us to stay focused on the issues that matter most to our business for the long-term, which are consistent with the four pillars of our Sustainable Business Framework: our community, people, environment and economic performance.All 42 Westfield Living Centres remained open.I am proud of our team who rapidly adopted new ways of working and kept delivering for our customers in COVID-Safe environments.At the time of publication of this report – 31 March 2021 – the Australian and New Zealand economies are on their way to recovery.Despite the limitations on people movement, our annual customer visits were more than 450 million. This demonstrates how essential our business and brand are to our customers.We have worked closely with government and industry stakeholders to support and apply COVID-Safe protocols to our industry and business so that our communities continue to feel safe when they visit us.The cash flow shock of the pandemic on our small to medium sized retailers was severe. We led the development of a voluntary code of conduct which was designed to target appropriate assistance and support for small to medium sized retailers (SMEs). The Code was mandated by governments throughout Australia and we voluntarily applied these principles to our New Zealand SMEs. This meant we were directly supporting rental relief, something no other industry has equalled throughout the pandemic. By year-end, we had reached commercial arrangements with 94 per cent of the retail brands across our portfolio including 2,456 SME retailers in line with the Code.We remained committed to our community initiatives and were agile in our delivery. We successfully delivered the third Westfield Local Heroes program and introduced new categories to recognise the community work focussing on crises such as the bushfire emergency.Likewise, our people maintained their focus on diversity and inclusion initiatives, delivering connection and engagement across our team on key days of significance with a focus on mental health and domestic and family violence.Momentum has been maintained on our environmental pillar and we announced our target to achieve net zero emissions by 2030 across our wholly-owned portfolio. We have agreed a pathway to achieve this and key initiatives are summarised in this report. We are encouraged by our ability to achieve our emissions intensity target five years ahead of its original date and will be resetting this target in 2021. We committed to the Task Force for Climate-related Financial Disclosures and our annual report and Climate resilience section on pages 38–42 provide more detail on how we are addressing the recommendations. We have improved our performance on key investor surveys, moving into the leadership band of Carbon Disclosure Project with an A- score and recognised as a Sector Leader for Development by GRESB.We have made progress on our supply chain commitments, including the introduction of our first Modern Slavery Statement, our Supplier Code of Conduct and a supplier industry database to strengthen our understanding of our suppliers and their needs. Our Modern Slavery Statement is available online.Our economic performance during 2020 was impacted by COVID-19. We acted quickly to secure additional funding so that we were in a strong financial position to see Scentre Group through and beyond the volatile period. Ending the year with a $771 million cash surplus, having not received any financial support from government nor raising equity from our securityholders, has been a pleasing outcome given the unprecedented operating environment.The targets outlined on page 9 are embedded into the initiatives that form our responsible business scorecard and govern key milestones for 2021. The leadership team is accountable for delivering these initiatives so we can continue to fulfil Our Purpose: creating extraordinary places, connecting and enriching communities.Peter Allen, Chief Executive Officer

Our CEO Peter Allen on leading with a responsible business mindset

Our CEO Peter Allen&#39;s contribution to SCN&#39;s 2021 CEO OutlookAs appeared in the Shopping Centre News Big Guns 2021 edition.We operate a business and brand that are important to our customers, essential to the community and unparalleled in terms of scale and proximity to where people live and work. Our customers regard what we offer as being an integral part of their lives.Our team heads into 2021 more focused than ever on our customers.What we learnt from last year is that regardless of the economic cycle, we must keep moving and innovating to deliver the most efficient platform for our retail and brand partners to connect with customers.We have a number of strategic initiatives underway that will drive our customer strategy in 2021, delivering on Our Plan to create the places more people choose to come, more often, for longer.Each of these initiatives is based on the principle that we compete for the time and attention of customers. Finding more reasons for customers to engage with us, more often and for longer, is how we add more value to our business.Our platform continues to attract customer visits at scale with more than 450 million customer visits in 2020, including an average of 46 million per month for the last quarter. This is on par with the comparative period in 2019. In 2020, Customers spent over $22 billion with our retail partners and enjoyed close to one and half hours of their time with us each visit.We’re evolving the Westfield ecosystem – creating more opportunities for interaction between Scentre Group, our customers, retailers and brands.During 2020, we trialled a contactless, drive-through aggregated click and collect platform called Westfield Direct. We made this happen in two weeks, providing a safe and efficient way for our customers to connect with our retail partners during a period of government restrictions. More than 14,000 products were available from 590 retailers across every Westfield Living Centre. We learned a lot from this trial and these insights form the basis for some other strategic initiatives we are pursuing.Another example of how we are continuing to find ways to engage with our customer is our membership program called Westfield Plus. We successfully introduced it across the full portfolio in 2020 and have more than 1.2 million members so far. What’s exciting is the customer engagement we are seeing. We’ve had over 7.3 million visits to the Westfield Plus App – with approximately half of all usage occurring in-centre. This provides us with unique insights into what our customers want and need, enabling us to curate the best mix of products, services and experiences for each Westfield Living Centre. Already we’ve offered a range of membership-only benefits to our customers and this will expand throughout the year.It is more evident than ever that physical retail stores are important for customer engagement. The most successful retailers are multichannel retailers with strong store networks.Demand for space in our Westfield Living Centres is strong. During the year, we completed 2,625 leasing deals including 848 new merchants, with 98.5% of the portfolio leased. We introduced 217 new retail brands to Westfield in 2020. We saw an increase in leasing momentum in the second half with over 2,000 leasing deals. The year finished with more new lease deals being agreed in the last quarter than in the last quarter of 2019. We’re expecting demand to remain strong as consumer confidence continues to rise and the economic recovery picks up pace.Whilst there has been some industry discussion about the structure of leases, we have not changed ours. Our leases are based on the mutual agreement to pay a fixed base rent.
Looking forward, we expect to see a heightened focus on data and analytics as we work with our retail partners to better understand how they can maximise their store network with us.When we look at the value of our space, we look at it not just in terms of sales performance, but also the franchise created in that location. In effect, brand and retail partners facilitate click and collect and last mile of delivery out of the store. This year we will continue to see more of our retail and brand partners optimising their stores and store network. Our Leasing and Retail Solutions team (LARS) has a dedicated data and analytics team that provides tailored insights to help our retail partners to optimise their store and space with us.Human beings are social beings and we continue to see opportunities to meet the needs for more interaction and connection in places like our Westfield Living Centre. Each of our centres is different, catering to the unique needs of its community. Over the last decade, we have seen a shift towards consume on-site or experiential based retail with our portfolio more than 43% experience-based. We think this will continue to evolve as centres keep adapting to changing customer needs and expectations. This is exciting for our team because it means our skills and capabilities to curate that ideal mix keeps improving.An example of how we keep evolving our team’s capabilities is the accelerated partnerships program approach within LARS where we focus on identifying activities, places and categories where customers spend their time when they are not at Westfield. We connect with relevant retailers and brands within those categories to leverage that opportunity to engage our Westfield customers, in turn attracting more customers to our centres.The first of these partnerships was FREAK Entertainment at Westfield Bondi Junction where we worked together to bring their unique free-roam virtual reality (VR) experience to life. FREAK covers 211 sqm and includes VR game facilities such as escape rooms and racing simulators. We are looking forward to sharing more details about other successful partners throughout the year.We aspire to be a third place for our customers after their home and workplace, a place where they want to spend time. We think about our Westfield Living Centres as social infrastructure and the space within our centres is flexible. By listening to the needs of customers and our communities, we can adapt and create opportunities for new uses. For example, we see a future where more education and childcare, co-working and health and wellness offerings are available in our centres and our team are actively exploring opportunities with brands and retailers in these sectors.In 2020, we were appointed as the third-party builder for Cbus’ Property’s residential and commercial tower project on the site of the former David Jones Menswear Store on the corner of Market and Castlereagh Streets in Sydney’s CBD. Our team was thrilled to be appointed as the Design &amp; Construction contractor for the development, showcasing our diverse design and construction capabilities. We expect to start the retail component of this development later this year.We have a number of other special projects we expect to start in 2021 including a restaurant and leisure precinct at Westfield Mount Druitt. In the CBDs of Liverpool and Parramatta, we have planning underway to improve and optimise our customer offer at our local centres.Our team continue to work successfully in partnership with department stores and larger retailers to optimise their store networks, sometimes this includes supporting them on strategies to ‘right size’ their stores. We see this as a positive outcome and an opportunity for us to continue curating the best retail, product and services mix for the local customer. For example, at Westfield Belconnen, we worked with Myer to transform their store from three-levels into a two-level experience specifically curated for the Canberran customer. At Westfield Hurstville, we refurbished a tenancy vacated by Target to bring in two new brands, Uniqlo, TK Maxx as well as a number of specialty stores to elevate the centre’s fashion and lifestyle mix.Throughout the year we will continue our focus on responsible business, delivering against the four pillars of our Sustainable Business Framework – our community, people, environment and economic performance.In 2020, we announced our target to achieve Net Zero Carbon Emissions by 2030 and committed to the Task Force for Climate-Related Financial Disclosures (TCFD). We have a roadmap to achieve our target which has three key areas of focus – optimising asset efficiency, renewable generation sources and residual emissions. Some of the initiatives to optimise asset efficiency includes implementing LED lighting across the portfolio and implementing energy analytics as part of our building management systems.One of our flagship responsible business initiatives is our Westfield Local Heroes community grants and recognition program which is now in its fourth year. Each year we award $10,000 to three deserving individuals and their organisations at each Westfield Living Centre, a total of $1.26 million. This program continues to engage our communities and we have seen a 40% increase in the number of community members voting for finalists. We launched the 2021 program in February and are looking forward to adding more alumni to this valued program.Looking to 2021, we’re feeling confident about the year ahead and through our latest customer research, we know our customers are feeling optimistic about the current environment and their own personal situation. They’re looking forward to enjoying more social and retail experiences with their friends and family.
Our team remains customer obsessed and focused on delivering what our customers want, 
fulfilling Our Purpose – creating extraordinary places, connecting and enriching communities.

Our CEO Peter Allen's contribution to SCN's 2021 CEO Outlook

Scentre Group Reports 2020 Full Year ResultsScentre Group Reports Full Year Operating Profit For 2020 Of $763.4 Million Net Operating Cashflow Improves 96% In Second Half Of 2020Scentre Group (ASX: SCG) today released its results for the 12 months to 31 December 2020 with Operating Profit of $763.4 million (14.71 cents per security). Funds From Operations (FFO) for the year was $766.1 million (14.76 cents per security).The Statutory result for the 12-month period, inclusive of unrealised non-cash items, was a loss of ($3,732) million. The result includes a reduction in property valuations of ($4,254) million during the 12-month period.Operating Profit, FFO and the Statutory result are each after expensing an Expected Credit Charge (ECC) of ($304) million related to the financial impact of the COVID-19 pandemic.During 2020, the Group achieved gross operating cash inflow of $2,357 million and net operating cashflows (after interest, overheads and tax) grew by 95.7% in the second half of the year resulting in $771 million for the 12-month period. The Group collected $2,059 million in gross rent collections, including $641 million during Q4 2020, equivalent to 100% of gross billings.Scentre Group CEO Peter Allen said: “We operate a business and brand that are important to our customers and essential to the community. Our business fundamentals remain strong and our strategy, focused on the customer, positions the Group for long-term growth.“2020 was a challenging year and I am proud of how our people adapted to the conditions, leading the industry and our business. We were proactive and deliberate in the decisions we made.“Every Westfield Living Centre has remained open every day, providing our retail and brand partners the opportunity to connect with the customer. During 2020, we had more than 450 million customer visits, including an average of 46 million per month during the fourth quarter. Customers spent approximately one and a half hours of their time on each visit.“We accelerated strategic customer initiatives such as our Westfield Plus membership program, which continues to grow and now has more than 1.2 million members.“We trialed a number of initiatives, such as aggregated ‘click + collect’ that facilitated our retail partners connecting with customers during periods of government restrictions. The learnings form the basis for strategic initiatives we are pursuing.“Our capital management actions were focused on strengthening our financial position and preserving value for the long term by not raising equity from our securityholders.“We did not receive any financial support from the Australian or New Zealand governments, including the JobKeeper program. We led the industry in the development of the Code of Conduct, supporting small to medium sized businesses across the sector.”Demand for space across Westfield Living Centres remains strong with the portfolio 98.5% leased at 31 December 2020. The Group completed 2,625 lease deals during the year, including 848 new merchants.The structure of leases has not changed and remains based on the mutual agreement to pay a fixed base rent.The Group continues to make progress on COVID-related deal negotiations. We have reached commercial arrangements with 3,398 of our 3,600 retail partners, including 2,456 SME retailers in relation to the Code of Conduct.During the year, the Group successfully completed a new dining precinct at Westfield Doncaster (Victoria), introducing 14 new restaurants to the centre. The $50 million project at Westfield Carindale (Queensland) was completed including the introduction of a new Kmart store. Special projects at Westfield Belconnen (ACT) and Westfield Hornsby (NSW) were also completed in the period.In December 2020, Scentre Group was appointed by Cbus Property to design and construct the residential and commercial tower on the site of the former David Jones menswear store on the corner of Market and Castlereagh streets in Sydney’s CBD.During 2020, the Group executed $10.1 billion of new and extended funding, including $3.6 billion of bank facilities, $2.4 billion of long-term bonds and $4.1 billion of subordinated notes, further diversifying the Group’s sources of capital, strengthening the Group’s credit metrics and protecting securityholder value. The Group now has available liquidity of $6.9 billion, sufficient to cover all debt maturities to early 2024.Interest cover for the period was 3.1 times and balance sheet gearing at 31 December 2020 was 27.7%.
The Group maintains “A” grade credit ratings by S&amp;P, Fitch and Moody’s.We continue to implement initiatives that support our strategy to operate as a responsible, sustainable business. During the year, we announced our target to achieve Net Zero Carbon Emissions by 2030 and publicly committed to the Task Force for Climate-Related Financial Disclosures (TCFD). Our 2020 Responsible Business Report and our first Modern Slavery Statement will be released on 31 March 2021.Mr Allen said: “We remain customer obsessed and focused on delivering what the customer wants. We will continue to innovate in how Scentre Group provides the best and most efficient platform for retail and brand partners to connect with the consumer.”“Whilst uncertainty remains in 2021, subject to no material change in conditions, the Group expects to distribute at least 14.00 cents per security for 2021. The Distribution is expected to continue to grow in future years. The Group plans to retain earnings to cover operating and leasing capital expenditure, fund strategic initiatives and reduce net debt.”Authorised by the Board.

Scentre Group Reports 2020 Full Year Results

A message from our Chairman and CEODear SecurityholderWe remain customer obsessed and focused on listening and adapting to our customers’ rapidly changing expectations.We remained committed to our customer strategy during the challenging operating environment of 2020, brought the future forward and focused on Our Plan. We were proactive and decisive in supporting our customers, retail partners and people to enhance long-term value for our securityholders.As a result, the Group achieved gross cash inflow of $2,357 million and net operating cash flows (after interest, overheads and tax) grew by 95.7 per cent in the second half of the year to $771 million. The Group collected $2,059 million in gross rent collections, including $641 million during Q4 2020, equivalent to 100 per cent of gross billings.Every Westfield Living Centre remained open, every day, providing our retail and brand partners the opportunity to connect with customers. Despite the government restrictions, we had more than 450 million customer visits in 2020.When we reflect on the year, we know our business fundamentals are strong. We operate a business and brand that is important to our customers and essential to the community. The strategic locations of our 42 Westfield Living Centres, close to where most of the population lives and works, our customer strategy, and our strong organisational culture underpinned by our diversity and inclusion strategy, means we are well-positioned for future growth.We are very proud of our people and their ability to remain agile and focused and thank them for their efforts and contribution.Our people maintained their dedication to customers and seized opportunities to do things differently. We accelerated new strategic initiatives to support our customer-driven strategy and meet the needs of our communities in a COVID-Safe way.This included piloting a contactless, drive-through aggregated click and collect platform called Westfield Direct. This was an extraordinary achievement, delivered within a two-week period, with internal resources from our digital and customer experience teams. We have taken advantage of the learnings from this period and directed them into the development of some new offerings which will launch in 2021.We successfully launched Westfield Plus in New Zealand in 2019 and introduced this membership platform to Australia in 2020, resulting in more than 1.2 million members so far. This is the next step in our customer strategy as we seek to find new ways to engage with our customers.Our commitment to major community initiatives was constant, including our Westfield Local Heroes program, which saw $1.2 million and 126 grants awarded to deserving individuals and their organisations across our communities.We maintain regular engagement with our customers to understand their needs, including our Westfield iQ research platform. Customers tell us they want to experience physical stores and experiences and interact with brands. This continues to drive strong demand as demonstrated by our occupancy of 98.5 per cent and deal activity, which saw more than 2,625 new leasing deals completed in the year, the vast majority of these completed in the second half.We did not receive any financial support from the Australian or New Zealand governments including the JobKeeper program. We played an industry leadership role through the Shopping Centre Council of Australia to support government engagement and public policy development. We focused our case-by-case support on those that needed the most help which were our small to medium (SME) sized ‘mum and dad’ retail partners. We reached commercial arrangements with 3,398 of our 3,600 retail partners including 2,456 SME retail partners in relation to the Code of Conduct for Commercial Tenancies.We increased our employee engagement activities and communications during the year to ensure our people remained informed and connected to the business. We maintained our momentum on our diversity and inclusion strategy and initiatives and prioritised our employee resource group deliverables around mental health and wellbeing and domestic and family violence.Our ability to make decisions through the cycle has underpinned investor confidence and support from debt capital markets when we needed it. At the onset of the pandemic, we acted quickly to secure additional funding, ensuring we were in a strong financial position to see the Group through and beyond the volatile period. Our capital management actions were focused on preserving value for the long-term and we did not seek equity from our securityholders.Most significantly, we priced a US$3.0 billion (A$4.1 billion) 60-year subordinated hybrid note issue in the United States market to diversify our sources of capital and ensure enough long-term liquidity to cover all debt maturities to early 2024.Our long-term objective to create sustainable returns for our securityholders is consistent with our approach to be a responsible, sustainable business. Our Corporate Governance Statement and Code of Conduct encapsulate our policies and how they are integrated into our decision making and culture.During 2020, we announced our target to achieve Net Zero Carbon Emissions by 2030 and committed to the Task Force for Climate-Related Financial Disclosures (TCFD). Page 16 of this report includes our first disclosure against TCFD recommendations in our annual report. Our standalone Responsible Business Report and our first Modern Slavery Statement will be released at the end of March 2021.Board renewal and succession planning continues to be a focus. The Board is committed to continuing to ensure that we include directors with an appropriate mix of skills, knowledge, experience and diversity, including gender. We are in the process of addressing further gender representation. During the year we were pleased to welcome Michael Wilkins and Guy Russo to the Board. Mike and Guy are valued business leaders and we are looking forward to their diverse perspectives and contribution to the Group.As consumer confidence continues to grow and the economic recovery picks up pace, the Board, management and our people are confident 2021 will bring a year of opportunity.We remain customer obsessed and focused on listening and adapting to our customers’ rapidly changing expectations. We will continue to innovate, pursue market share and deliver on Our Purpose and Our Plan – creating the places more people choose to come, more often, for longer.We thank our people for their commitment to our customers during a disrupted year, and for their contribution to this year’s results.Thank you for your continued support of Scentre Group.Brian Schwartz AM, Chairman
Peter Allen, Chief Executive Officer

A message from our Chairman and CEO

Nothing Stops Christmas at WestfieldAs the countdown to Santa&#39;s arrival continues, Westfield has released its official Christmas campaign; The Night (way) Before Christmas, revealing the magic that goes into making Christmas so memorable at all 42 Living Centres across Australia and New Zealand.Scentre Group, Group General Manager, Customer Experience, Lillian Fadel, said:Our customers have told us Christmas is more important than ever this year, which is why we remain focussed on delivering a COVID-Safe experience and share much-needed cheer across our communities.Right now, our team are working hard to ensure our centres will be filled with the magic customers have come to love and expect from us, including larger than life decorations and Santa sets, sparkling lights, beautifully decorated Christmas trees and much more. We look forward to sharing in this joyous and special time with our customers.

Nothing Stops Christmas at Westfield

Westfield Local Heroes 2020 Grant Recipients AnnouncedWestfield Living Centres across Australia and New Zealand have announced the Westfield Local Heroes grant recipients for 2020, as nominated and voted for by the local communities.Every year, Westfield Living Centres across Australia and New Zealand each award up to three, $10,000 grants to deserving individuals and their organisations who dedicate their time to positively impact the lives of others. The Westfield Local Hero grants are awarded to further support the important contributions they make in their communities.Earlier this year communities across Australia and New Zealand were called upon to submit nominations for everyday heroes they believe would benefit from the recognition before being put to a public vote. Over 140,000 votes were received from across the community for all finalists.
Speaking to the success of the 2020 Westfield Local Heroes program, Scentre Group National Community Experience Manager Pam Wilson said:“Through the Westfield Local Heroes program, we continue to recognise and reward
everyday people doing extraordinary things within our communities. We are thrilled to be able to support the incredible work they are doing every day and it’s with great pleasure that we announce our 2020 Westfield Local Heroes grant recipients.”“We thank our customers for casting their votes and helping determine our 2020 Westfield Local Heroes across our centres.”
The 2020 Westfield Local Heroes program ran across 42 Westfield centres throughout Australia and New Zealand, with 126 grants and a total of $1.26M awarded. The program applies to a variety of sectors, including business, sport, government, education, sports, welfare, environment, community and not-for-profit. The Local Heroes program will also return in February 2021.Launched in 2018, the Westfield Local Heroes program discovers and celebrates individuals and their organisations whose work or activities create positive benefit for others in one or more of the following ways: nurturing a sense of belonging and inclusion, helping in times of community crisis, building community resilience, promoting positive health and wellbeing, improving access to community services and groups, and protecting the local environment. Over $3.6m has been donated to these groups and services in the last three years.

Westfield Local Heroes 2020 Grant Recipients Announced

SCG Reports Half Year Operating Earnings of $361 MillionScentre Group (ASX: SCG) today released its results for the six months to 30 June 2020 with Operating Earnings of $361 million (6.94 cents per security) and Funds From Operations (“FFO”) of $362 million (6.96 cents per security).The Statutory result for the six-month period was a loss of ($3,613) million. The Statutory result includes an unrealised non-cash reduction in property valuations of ($4,079) million.Operating Earnings, FFO and the Statutory result are each after expensing an Expected Credit Charge (ECC) of $(232) million related to the financial impact of the COVID-19 pandemic.During the six-month period, the Group achieved gross cash inflow of $1,059 million and a net operating cash surplus (after interest, overheads and tax) of $261 million.Scentre Group CEO Peter Allen said: “I am very proud of our team, particularly how we responded and adapted to the significant changes brought about by the COVID-19 pandemic. Our results, including the ability to generate an operating cash surplus, demonstrate the long-term resilience of our business.“A fundamental strength of our business is the strategic location of the Group’s network of 42 Westfield Living Centres. Our centres are in close proximity to the most densely populated urban areas with more than 16 million people living within a 30-minute drive of one of our centres.“We remained focussed on providing our customers with the ability to continually meet their needs throughout the period. We did this by remaining open as well as implementing, and communicating, the highest standards of health and safety protocols.“As customers are returning to our centres, more than 93% of retail stores are open across the portfolio (excluding our Victorian centres). Portfolio occupancy was 98.8% at the end of June 2020.“We accelerated strategic initiatives such as Westfield Direct and Westfield Plus, leveraging the convergence between physical and digital, to facilitate customers connecting and interacting with our retail partners beyond the traditional physical interaction.“We launched Westfield Plus, our membership customer engagement platform, at Westfield Newmarket in New Zealand in late 2019 and recently introduced the program in Australia. We now have more than 500,000 members on Westfield Plus and this continues to grow.“At the onset of the pandemic, we acted quickly to secure additional funding, ensuring we are in a strong financial position to see the Group through and beyond the volatile period.”So far this year, the Group raised or extended $5.8 billion of additional funding, including $3.4 billion of bank facilities and $2.4 billion of long-term bonds. The Group currently has available liquidity of $4.4 billion, sufficient to cover all maturities to January 2023.Interest cover for the period was 3.6 times and balance sheet gearing at 30 June 2020 was 38.4%.
“We led the development of a voluntary code of conduct which was designed to target appropriate assistance and support to small and medium sized retailers (SMEs) during the pandemic. The Code of Conduct (the Code) was mandated by governments throughout Australia and we voluntarily applied these principles to conversations with our New Zealand SME retailers,” Mr Allen said.“We acknowledge that this has been a difficult time for our customers and our retail partners.  We have supported our retail partners throughout this period on a case-by-case basis. We have done this without receiving financial assistance from Government.“The shopping centre industry has provided over $1.6 billion of support for retailers during the pandemic. Our industry is unique in that it has provided, and self-funded, a level of financial support beyond any other industry as well as most government pandemic support packages.“We have agreed arrangements with 2,438 of our 3,600 retail partners, including 1,624 SME retail partners.
“Importantly, the structure of our leases with our retail partners has not changed and remains based on the mutual agreement to pay a fixed rent.”SME retail partners represent approximately 30% of the Group’s rental income. Under the SME Code, SMEs are able to reduce the amount of cash rent payable commensurate with the decline in sales they may have experienced during the pandemic and post pandemic (“recovery”) period.For the six-month period, the Group collected 70% of gross rental billings and for the months of June and July 2020, gross rental billings collections were over 80%. The gross rental billings used in calculating these collection rates have not been adjusted for the impact of applying the Code and its impact in reducing the actual amount of cash rent collectible during the period.In-store sales for our retail partners were impacted by the pandemic and the associated restrictions on people movement. In-store sales for the retail partners that traded throughout the six-month period were 8.1% lower compared to the previous corresponding six-month period in 2019. Specialty in-store sales were 12.1% lower for the six-month period compared to the previous corresponding period.During the half year, we continued to progress the projects that were already underway at Westfield Doncaster (Victoria), Westfield Belconnen (ACT) and Westfield Hornsby (NSW). The $50 million project at Westfield Carindale (Queensland) will complete in September 2020.The Group continues to implement initiatives that support our strategy to operate as a responsible, sustainable business. During the half, we announced our target to achieve Net Zero Carbon Emissions by 2030. The Group recently committed to the Task Force for Climate-Related Financial Disclosures (TCFD).Mr Allen said: “The underlying fundamentals of the Group’s business remain strong and the business is well positioned to deliver long-term sustainable returns for securityholders through economic cycles.“We have a great team of people who are customer obsessed and I am confident that we will continue to be agile in adapting to the inevitable uncertainties during these times.“We own and operate major essential social infrastructure in the best locations close to where people live. We will continue our focus on further developing strategic initiatives that enhance our deep knowledge, relationship and engagement with our customers to deliver what our customers want.”As previously announced the Group will not be providing earnings or distribution guidance.Authorised by the Board.

SCG Reports Half Year Operating Earnings of $361 Million

Customer visitation lifts as restrictions continue to ease and more stores openScentre Group’s latest customer update supports what its Westfield Living Centres have witnessed throughout June - customers have followed through on what they told us they would do when restrictions eased – dined out, shopped for winter fashion and immediately resumed beauty services.Approximately 92% of retail stores across Australian Westfield centres are open with 94% open across New Zealand Westfield centres. There are no physical distancing requirements in New Zealand since the move to alert level 1.In Australia, more stores will open throughout July when restrictions on some entertainment, experience and dining categories are lifted such as cinemas, gyms and foodcourts.Yet despite some category restrictions remaining in Australia, last weekend (27-28 June) customer visitation across Scentre Group’s Westfield portfolio returned to 86% of what it had been at the same time the year prior.In some centres, daytime visitation (10am – 4pm) is back to 90% of what it had been compared with the same period last year. Night-time visitation is expected to lift throughout July as entertainment and leisure options open up.Scentre Group Director Customer Experience, Phil McAveety, said: “The immediate uplift in customer visitation reflects our desire as social beings to engage with friends and family and experience products and services in person.“What customers are telling us is that they want to get out and about again to their local centres because it’s part of their lives and daily activities. Customers are feeling assured by safety and hygiene measures in our centres and are feeling more confident as they move around their local communities, of which we are a major part.“Consumer spending by category post restrictions matches the pandemic experience and easing of restrictions – supermarkets and premium food continue to perform well; youth-oriented and contemporary fashion has bounced back, as have beauty services. The night-time economy is expected to lift throughout July in line with further easing of restrictions on entertainment, leisure and dining.“Many of our retail partners noted a spike in online sales during the height of the pandemic, particularly those that had closed their physical store network. Now that the vast majority of physical stores are open and trading, we’re seeing those retailers benefitting from the ‘network effect’ of an integrated strategy across both physical and digital channels that allows them more opportunities to engage with their customers, more often.“Our Westfield Living Centre teams continue to adapt and adjust to government measures as restrictions ease. We thank our customers for their efforts to practice physical distancing and ask for their continued patience when they visit our centres.”Read the full June Customer Update, type: asset-hyperlink id: 4p6ORurPkWCmGBJa57yDD9.

Customer Update: Customer visitation lifts as restrictions continue to ease and more stores open

Consumers feeling more optimistic and returning to experiences and shopping in personAustralian and New Zealand consumers are feeling more optimistic and have an appetite to safely return to activities, experiences and shopping in person. Customer visitation has steadily increased across all Westfield Living Centres throughout May, co-inciding with more retailers re-opening stores and government restrictions gradually easing.Approximately 80% of stores are open across Australian Westfield Living Centres and 93% of stores are open across New Zealand Westfield Living Centres.Customer visitation at the week ending 24 May 2020 has returned to 80% of what it had been in May the year prior.Consumer sentiment from Westfield customers through our Westfield iQ1 research platform is encouraging and reflective of our desire as social beings to engage with friends and family and experience products and services in person.Customers feel reassured by the overt and practical safety and hygiene measures in centres which includes signage, public announcements, availability of hand sanitiser and more frequent cleaning in-centre. This is consistent with our operational procedures which have been communicated to customers and our support for the Retail Recovery Protocols which were announced on 1 May.According to Scentre Group’s Director of Customer Experience, Phil McAveety: “Our latest customer research supports what we have witnessed in our centres over the past three weekends in May - more customers feel more confident to visit their local Westfield Living Centre, plus they have more reasons to visit with a diverse range of retailers re-opening. Customers have told us they feel reassured by the visible and practical safety measures in place at our centres.&quot;Unsurprisingly, when asked to nominate the top three things they want to do when more
restrictions ease, customers have told us it is going out for a meal, spending time with loved
ones and going out shopping. Top three purchases customers want to make in person are winter fashion, homewares and shoes.&quot;Customers know physical distancing will be with us for some time. They are prepared to queue and adjust as the economic recovery starts to take place because they value the convenience and interaction of an in-store experience at their local Westfield Living Centre.&quot;We thank our customers for their efforts to practice physical distancing and ask for their
continued patience when they visit our centres.”Read the full customer update type: asset-hyperlink id: 3r4tFdF684kwHi0K6gQyMF

Consumers feeling more optimistic and returning to experiences and shopping in person

The new normal: retailers accelerate physical and digital integrationAs retailers gradually begin to re-open their stores, many are doing so with initiatives which converge the digital and physical channels in innovative ways.There’s no doubt COVID-19 has created unprecedented disruptions for physical retailing, with many consumers staying at home while those who do venture out being required to observe physical distancing practices, reducing the number of customers allowed in stores at any one time and changing the way people can move around shopping centres.Retailers have responded by boosting their pure online capabilities, but many of the new initiatives are accelerating a trend which was gaining momentum before COVID-19, the convergence of sales channels to create a hybrid physical and digital experience.Faced with unprecedented challenges, the retail industry has been quick to adapt its business models and many of these changes will continue into the future.For Harry Hartog Booksellers, this has meant boosting their online capability and introducing a free home delivery service for the first time as well as adapting their book recommendation service to be fully operational online. Book recommendations are created manually by expert booksellers across Australia. Customers can then opt to have their books delivered to directly to their home.Harry Hartog Directors, David and Robert Berkelouw, said: “We have dedicated our careers to creating bookshops full of imagination, emotion and empathy. At a time when society needs them most, we have
been determined to keep supplying books, even from behind closed doors. We believe books have the power to create hope and to elevate us – even momentarily – from a world that has been overwhelmingly anxious and scared.”David (left) and Robert Berkelouw, Directors, Harry HartogIn some cases, the current situation has brought forward innovations which retailers were planning for several years out, but which have been urgently fast-tracked as effective solutions for the unique lockdown period.One example of this is the new drive-thru contactless click and collect service which is now available at all Westfield Living Centres, giving access to more than 540 retail brands with more signing on every week.Westfield Direct enables customers to access multiple Westfield retailers in one online transaction, and pick-up in one, contactless stop at their local centre.Orders come through to Westfield employees, known as ‘runners’, who take the items from each retail outlet to the drive-thru, updating customers by email at each stage of the process.The platform gives consumers access to over 15,000 products across a variety of categories, from fresh food to lifestyle and everyday essentials.Participating retailers include leading brands such as Harris Farm Markets, Bakers Delight, Betty’s Burgers, Haighs Chocolates and Boost in the food and beverage sector, along with lifestyle brands such as Aesop, Kidstuff, Harry Hartog, Kiehls, Papaya and many others. In New Zealand, retailers to recently join the platform include Inca by Nic Watt, Presshouse Café, Boba Bear, Hulucat Tea &amp; Mocktail, Tai Ping, Tank, The Coffee Club and The Botanist Florist, with more to come.Fiona Krawczyk, marketing manager for Haigh’s Chocolates, says the initiative has opened up a crucial channel which has enabled the company to continue to serve its customers and maintain local production.This new service helps customers support local and small businesses and in our case also the purchasing of Australian-made products, during a challenging time, and that can only be a good thing,” Krawczyk said.At Bakers’ Delight, joint chief executive Elise Gillespie says bakery teams are working hard to ensure that customer who are staying at home still have access to the company’s popular products.“Almost every one of our Westfield-based bakeries has jumped on board with this initiative,” Gillespie said.“Feeding and supporting local communities has been a part of our DNA for decades and its during times like these that Aussie families need us more than ever.”Scentre Group’s Director of Customer Experience, Phil McAveety, said the challenging conditions posed by the pandemic demanded an “agile response to the fast-changing needs of customers” and the company would continue to adapt.Scentre Group was able to fast track the Westfield Direct concept, he said, and move from sketches on a whiteboard to going live within a matter of weeks.Whilst the team was initially focused on existing fashion retailers who offered click and collect, as more retailers shut their doors it became clear that the needs were much wider.The Scentre team then pivoted to include food service partners, with a view to making it easier for their customers to order and collect.The capabilities of the eCommerce function were also upgraded through leveraging the technologies used in the new Westfield Plus app which was recently launched in New Zealand, and the new Westfield Digital Gift card in Australia.“For our retail partners, Westfield Direct provides a new way for them to continue reaching their customers,” said McAveety.“The response from our retailers so far has been overwhelmingly positive, with dozens joining each day and we’re looking forward to seeing where the Westfield Direct service takes us in the coming months.”In the meantime, many retailers are beginning to reopen their doors and are focused on ensuring they do so with the health and wellbeing of their customers and employees front of mind, in line with the COVID-19 Retail Recovery Protocol, launched jointly by the industry on 1 May 2020.For some retailers, especially in the luxury category, it’s a matter of offering viewings to private groups of customers by appointment only. Many luxury brands that voluntarily decided to close their doors during March, have all now reopened at Westfield Sydney and Westfield Bondi.Homewares brand, Adairs has announced it’ll begin to reopen stores in May, with Chief Executive Mark Ronan saying: “Our staged store openings reflect our ‘safety first’ approach as we welcome back our team and customers into our stores. There is still a long way to go, however the actions and contributions made to date put us in a strong position to navigate this changing environment.”National children’s retail group Kidstuff has reopened selected stores, some with reduced trading hours, and has also put in place social distancing measures.

The new normal: retailers accelerate physical and digital integration

A Message from our ChairmanAt today’s 2020 Annual General Meeting, our Chairman, Brian Schwartz, made the following address.On behalf of the Board, I want to thank you for participating in today’s online Annual General Meeting. I hope you and your families remain safe and well.We appreciate your understanding as we adapt the format to address the meeting restrictions and social distancing measures that are in place in response to the Coronavirus pandemic.We intend to keep this meeting as succinct as possible given the revised format and the materially different operating environment.I will make some opening remarks to provide context for today’s meeting.Our Chief Executive Peter Allen – who is also the Chairman of the Shopping Centre Council of Australia, a position that is extremely relevant for our business at this point in time – will then provide an update on our current situation.I would like to acknowledge Peter for his unwavering industry leadership especially over the past few weeks as a Small to Medium Sized Retailer Leasing Code of Conduct was negotiated and agreed between the National Retailers Association, the Australian Retailers Association, the Pharmacy Guild and the Shopping Centre Council. This was submitted to National Cabinet and yesterday the Australian Prime Minister the Hon Scott Morrison MP announced a Commercial Tenancy Code to be legislated by the states and territories. Peter will talk more about this in his address but suffice to say we and other industry operators are grateful for his initiative and steady and committed leadership.There is no precedent for the situation we find ourselves in as we respond as an industry and as a company to the pandemic.Following our 2019 full year results presentation on 18 February, our CEO and CFO embarked on investor meetings and separately I, with the Chair of our Human Resources Committee, undertook investor meetings as part of our typical preparation for today’s annual general meeting.Those traditional meeting agendas and conversations quickly became less relevant as the focus was on the rapidly changing global situation and unprecedented health and economic response to the pandemic.On 10 March, we informed the market we had paused our security buy-back program given the market volatility.On 20 March, we informed the market that the Group’s operations performed in line with expectations during the early part of 2020. However, in light of the COVID-19 pandemic and continued volatility in markets globally, we suspended the Outlook for 2020 that was previously announced.Throughout the month of March, governments in Australia and New Zealand announced a range of health and economic measures to restrict further transmission of the virus.Our business has quickly implemented what is required.The Board and management have worked closely throughout this period to stay abreast of the rapidly evolving situation with daily communication and engagement and regular updates from the team.Our approach as a Group has remained constant throughout – we have implemented a range of precautions to balance the health and wellbeing of our people, customers and retail partners with the important role of supporting business continuity and economic activity to the extent we possibly can.On 1 April 2020, we were able to provide a liquidity update to the market. Despite the volatility and upheaval in markets, the financial strength of the Group was demonstrated with our ability to arrange additional facilities that increased the Group’s available liquidity position by $1.9 billion to $3.1 billion.  We continue to engage with debt investors globally, with a view to entering into long term bonds at the appropriate time.We will continue to focus our efforts on maintaining our business operations and continuity within government guidelines. This includes reviewing the level of all our operating costs including Board and senior management remuneration.  An announcement will be made at the appropriate time when this review is complete.
On behalf of the Board, I would like to extend my thanks to Peter and the management team for their ongoing efforts to work through this exceptional and difficult period to ‘get to the other side’.At this point and given the uncertainty regarding the economic impact of the pandemic, it would not be appropriate, or indeed possible, to provide any further comment on our earnings or distributions.
Board renewal and succession planning remains a central component of the Board’s role and the Group’s overall governance program.The Board has continued to review the ongoing skills required for our Company and is committed to diversity of Board composition, including in gender, skills and experience and diversity of thought. In defining the Board’s requirements for new Directors, consideration is given to the skills, experience and background of existing Board members, the Group’s strategy and any identified new skills required to supplement the Board’s capabilities.Aliza Knox is retiring from the Board today. Aliza has been a director since April 2015, not long after the inception of Scentre Group, and on behalf of the Board and management team I would like to express our sincere thanks for her contribution during such a pivotal time for our organisation. We wish Aliza well in her future endeavours and Aliza, I hope you will continue to provide us with your insights wherever you may be around the globe.Today we have Andrew Harmos standing for re-election and Mike Wilkins standing for election both with the full support of the Board.With those few words, I would now like to introduce our CEO Peter Allen to deliver his address.

A Message from our Chairman

2019 Full Year Results

A message from our Chairman and CEODear SecurityholderWe are pleased to report our financial performance for the year was strong with Funds from Operations (FFO) growing by 3.2% on a pro forma basis (1) and distributions growing by 2.0%, both in line with forecast.We have delivered what we said we would because we have remained focused on our customers and curated our offer to keep pace with their changing expectations.Operating Earnings – the Group’s FFO excluding Project Income – was $1.287 billion for the 12-month period, up 1.0% per security or 3.6% on a pro forma basis.The strength of our portfolio and source of competitive advantage for our leading operating platform of 42 Westfield Living Centres is executing a customer focussed strategy and consistently delivering results.Our plan and strategic objective is to create the places more people choose to come, more often, for longer.
Annual customer visits increased by more than 12 million during 2019 to over 548 million and our occupancy remains high at 99.3%. We are the leading platform in Australia and New Zealand for retailers and brands to interact with consumers.Retail partner in-store sales within our portfolio grew by $1 billion during the year to $25 billion. This represents more than 7.5% of total retail sales in Australia. We have 3,600 brands represented in more than 12,000 outlets across our portfolio. The average annual specialty in-store sales within our portfolio is $1,525 million per store.
By listening and acting on what our customers want we have actively curated the mix within our portfolio.During the year we introduced 344 new brands to our portfolio and 279 existing brands grew their store network with us.In recent years we have seen consumers shift their preferences towards experiential retail and consume on-site. Today, 43% of the stores in our portfolio are experienced based. Customers want a seamless shopping experience. We continue to see increased investment in click and collect as retailers seek to optimise their store networks and close proximity to customers.We view this as an opportunity and believe that physical retail is, and will remain, a central part of the retail ecosystem – key to retailers’ sales and distribution strategy. This is based on the fact that well-located high-quality physical retail, like our portfolio, is the most cost-efficient means for a brand to engage with the customer. It is also difficult to replicate.We continue to innovate in how we engage with our customer to leverage these opportunities. New technologies are providing more opportunities to enhance our direct engagement with the consumer. For example, as part of the launch of Westfield Newmarket, we developed and launched Westfield Plus, a mobile app based membership program. More than 200,000 customers in New Zealand have downloaded the app.The Group’s completion of the NZD790 million Westfield Newmarket development on time was a highlight of the year, creating the leading lifestyle and fashion destination in New Zealand.We continue to reinvest in the portfolio and have commenced a number of projects that will improve the offer and experience for our customers. This includes commencing the $50 million project at Westfield Carindale which includes a new David Jones and introduction of Kmart; the $55 million dining and entertainment precinct at Westfield Mt Druitt adding 12 new rooftop restaurants as well as $89 million of special projects including the opening of Bradley Street dining precinct at Westfield Woden and the expansion and refurbishment of the dining precinct at Westfield Doncaster.Capital management continues to be a priority for the Group.In 2019 we released $2.1 billion of capital through the divestment of the Sydney Office Towers for $1.52 billion and the joint venturing of Westfield Burwood for $575 million. The capital released from these transactions is being redeployed into our business.During the year we acquired a 50% interest in Westfield Booragoon in Perth for $570 million, becoming the long-term manager and developer for that centre. Westfield Booragoon’s strategic location and high quality make this acquisition consistent with our strategy. We also commenced our security buy-back program of up to $800 million and to date have purchased $304 million securities.The Group’s financial position remains strong with FFO to Debt of 10.3% and interest cover of 3.6 times. Our balance sheet gearing is 33% at 31 December 2019. Our balance sheet does not ascribe any value to the Group’s unique operating platform, which generates more than $215 million equivalent to 16% of our FFO. The Group has A grade credit ratings from S&amp;P, Fitch and Moody’s. We continue to maintain high levels of liquidity with undrawn committed facilities and cash totalling $1.8 billion.Our long-term objective to create sustainable returns for our securityholders is consistent with our approach to be a responsible, sustainable business. Our Sustainable Business Framework is built on four pillars – our communities, our people, our environmental impact and our economic performance.Our Westfield Living Centres are regarded as valued social infrastructure and at times of emergencies, are regarded by local authorities as places of refuge and shelter. Whilst our assets were not directly impacted by Australia’s recent bushfire emergencies, we believe we have a role to play in the nation’s recovery process. We partnered with the Salvation Army as part of our response to the bushfires by way of a cash donation of $500,000 and will provide significant in-kind support through our digital screen and media networks across our platform to expand the reach of their message and facilitate further fundraising.Creating a safe, healthy, diverse and inclusive workplace where talent thrives is the focus of our people strategy. We were pleased to have sustained a high employee engagement rate of 84% in our most recent engagement survey, which places us in the top 2% of companies globally. We have recently been included in the 2020 Bloomberg Gender-Equality Index acknowledging our focus on talent, diversity and inclusion in a global peer group.We are committed to operating an efficient and resilient business for the long-term.We have existing environmental targets for emissions intensity, waste and recycling that our teams are making progress on. In addition to this, the Group today announced it will target net zero emissions across our wholly-owned portfolio by 2030. Work will continue in FY20 to align initiatives to our primary environmental target.
Full highlights and performance data across our four pillars will be disclosed in our standalone Responsible Business report at the end of the first quarter.As we look to the year ahead, the Group forecasts Operating Earnings for the 12 months ending 31 December 2020 to be between 24.75 and 24.80 cents per security. This would represent growth, on a pro forma basis, of approximately 3.1%.The Group forecasts to achieve Project Income (after tax) of approximately $28 million. This is a function of the amount of project work currently underway on behalf of external parties. The Group forecasts FFO for the 12 months ending 31 December 2020 of approximately 25.30 cents per security. This would represent growth, on a pro forma basis, of approximately 0.7%. These forecasts do not take into account the expected positive impact of completing the remainder of the up to $800 million security buy-back program. The distribution for 2020 is forecast to be 23.28 cents per security, an increase of 3%. In future years distributions are expected to grow in line with growth in Operating Earnings.We would like to thank our people for their commitment to our customers during 2019 and for their contribution to this year’s results. The Board, management and our people are excited about the future of our business and our ability to listen and respond to rapidly changing customer expectations.To be successful in today’s market, you need to have your eye firmly on your customer and stay close to their changing needs and preferences. Our ability to understand what customers want has secured a strong position for our business. Our proposition is to deliver long-term sustainable returns through economic cycles.
We will continue to adapt, grow earnings and distribution and deliver on Our Purpose: creating extraordinary places, connecting and enriching communities.Brian Schwartz AM, Chairman
Peter Allen, Chief Executive Officer
(i)  Pro forma FFO adjusts for the transactions completed during the year, including the sale of the Sydney Office towers for $1.52 billion in June 2019, the 50% joint venture of Westfield Burwood for $575 million also in June, the acquisition of 50% of Westfield Booragoon for $570 million in December and the $304 million of securities bought back under the 2019 buy-back program as at 31 December 2019.

MATES In Construction officially launches in New ZealandThe innovative MIC program leaps across the Tasman to help address the suicide rate among construction workers in New Zealand.“MATES In Construction actively encourages construction workers to keep an eye on their colleagues. It gives them information on how to recognise the warning signs and the confidence to intervene if they think that something is wrong.” - Scentre Group​, Senior Contracts Administrator, Tim Ingham.To enable our talent to thrive, one of Scentre Group’s eight diversity and inclusion pillars is the mental health and wellbeing of all employees. Our goal is to support our people to have balanced lives and healthy minds through a range of initiatives that contribute to a mentally healthy workplace and improve healthy behaviours.Aligning with this goal not only for our employees but the wider construction industry in New Zealand, in October 2019, our Design &amp; Construction team led the establishment of a suicide reduction charity, MATES in Construction (MIC). With rising suicide rates in New Zealand, particularly among construction workers, MIC seeks to help address the problem.A 2019 BRANZ report, Suicide in the NZ Construction Industry Workforce, reports that in the year to June 2019, 685 people died by suicide and of these, 6.9% (47) were attributed to the construction industry. According to the report, suicides have been rising for four consecutive years with men accounting for three out of four cases. It was clear that something had to be done.MIC was originally established in Australia in 2008 as a response to the high rate of suicide among Australian construction workers. Scentre Group became an accredited MIC partner in 2016, in line with its broader commitment to diversity and inclusion and the goal of creating a culture where employees feel safe to bring their whole selves to work.The catalyst to catapult the MIC initiative across the Tasman Sea came after Scentre Group’s Tim Ingham moved to Auckland in 2016 to work on the company’s Westfield Newmarket development.&quot;I&#39;ve worked on plenty of construction sites in Australia and have seen first-hand the positive impact of MIC on employee and contractor mental health. Soon after I arrived in New Zealand and was setting up our site health and wellbeing committee, I realised two things: firstly, MIC didn’t exist in New Zealand and secondly, it definitely should,” explains Tim.Simultaneously, Tim’s colleagues, Darren Ellis, General Manager, Construction and Donny Carroll, Regional Design &amp; Construction Risk Manager, had come to a similar conclusion. This led to Darren facilitating an information session for the Auckland construction market in 2017. The group then helped to form an Industry Steering Committee in 2018 and led a campaign to raise funds, coordinate stakeholders and launch the program in 2019.Scentre Group offered its Westfield Newmarket development as a pilot site with opportunities for all employees and contractors to participate. In total, three MIC General Awareness Training (GAT) sessions were held at Westfield Newmarket, including the inaugural MIC GAT session. In total the training was delivered to approximately 250 staff and contractors.The training has three tiers. GAT is the first which is delivered to everyone on a worksite. The second provides more in-depth information and resources to a group of selected participants. The third is the provision of mental health first-aid training to a smaller group of workers that helps them manage an immediate, critical incident.
Tim says the initiative is so successful because it is peer-to-peer.“The focus of MIC is to be an antidote to the macho culture that can sometimes prevail in the construction world. It helps construction workers open themselves up to having real conversations with their colleagues and peers about things that actually matter,” he says.After all the hard work establishing the program, MATES In Construction New Zealand CEO, Victoria McArthur, says it was exciting to finally launch the program in central Auckland in front of a packed room of industry, government agencies, local Iwi, member organisations, politicians, media and stakeholders.“Industry has welcomed the introduction of the MATES programme with open arms and it couldn’t have come soon enough. The influence of the programme is already being felt on sites across Auckland with over 1300 workers inducted through General Awareness Training. We have already grown the team to four field officers and one case manager and see this further expanding to meet the growing demand,” she says.“There is a lot happening behind the scenes with marketing the brand, precuring further partners, lobbying for Government support and forming our research and evaluation group. We are also looking to do a literacy review of materials and translations to ensure our audience can engage.”&quot;The reception that MATES has had here in NZ can be largely attributed to the ground work of the foundation organisations that drove its implementation into our industry. Leading this drive has been Scentre Group, who having worked with MATES in Australia and seeing its results, championed hard to bring the program across the Tasman,”  - MATES In Construction New Zealand CEO, Victoria McArthurAlthough Tim’s direct involvement is now largely complete, he says he will watch the nationwide roll-out of the program with great interest.“I’m very pleased to have worked with the steering committee. MATES wanted to approach it in a very practical way so it can continue to grow organically, and that’s exactly what’s happening now, which is great.”

MATES In Construction officially launches in New Zealand

Closer to home: micro-CBDs and the emerging night-time economy&quot;Shopping centres are growing into destination centres, no longer just for clothing purchases or a cinema visit. Today, they’re becoming our backyard playgrounds, offering a range of alternate forms of entertainment in a central location. This includes restaurants, dining experiences and bars, which a decade ago would have been located elsewhere.&quot; - CEO, The Signature Group, James Sinclair.Australia’s changing demographics are transforming where people go for entertainment and to meet and celebrate with family and friends.As our population increases, there is growth into suburban areas, particularly among younger millennials who are often priced out of inner-city real estate.Our house and land sizes are getting smaller and many people are opting to live in apartments and town houses where it is not so convenient to entertain larger groups.Sensitive to these changes, the retail, entertainment, and food and beverage industries are locating facilities closer to these new population centres, and updating what they offer to cater to a local night-time economy, which is increasingly moving to new types of venues and locations outside of the major CBDs.“The traditional shopping centre is increasingly becoming the town centre and hub for the community,” says James Sinclair, the Chief Executive of the Signature Group, which operates the Sporting Globe brand of sports bars and acquired the TGI Fridays restaurant business in 2017.“Shopping centres are growing into destination centres, no longer just for clothing purchases or a cinema visit. Today, they’re becoming our backyard playgrounds, offering a range of alternate forms of entertainment in a central location. This includes restaurants, dining experiences and bars, which a decade ago would have been located elsewhere.”A major driver for change is population growth. Sinclair says Australia’s population is expected to grow by nearly 12 million, or by around 50 percent, over the next 25 years, and is a key driver of Signature Group’s strategy.Decentralisation will be a key urban theme as the population increases. The Greater Sydney Commission, for example, released plans for a “Metropolis of Three Cities” around the existing CBD, Greater Parramatta and Western Sydney, while Melbourne’s plan is for a ring of satellite cities as the population surges towards nine million.Scentre Group General Manager, Development and Asset Management, Ric O’Connell, says the emergence of micro CBDs where people are living within 30 minutes of their jobs, education, health facilities, services and experiences is becoming more of a reality.“With 65 per cent of the Australian and New Zealand population living within 30 minutes of a Westfield Living Centre, we have a vision to be a leader in developing a healthy night-time economy in emerging micro-CBDs across the country,” he says.“It makes sense for us to be offering safe, secure, night-time entertainment for locals to enjoy themselves. This is something we aim to grow into an 18-hour economy.“We know our customers want somewhere local to socialise, dine, be entertained and then go to a wine bar or micro-brewery for a night cap without having to pay through the nose for an Uber home from the CBD,” he says.“This evening social scene is traditionally something people would enjoy at a night spot in the CBD, and we need to be offering them a variety of options that allow them to stay close to home but still go out for a good time.”This is part of the reason Scentre Group is transforming its portfolio of 42 Westfield centres from shopping centres to Living Centres.It’s a strategy that resonates with Signature Hospitality Group.“We see the spread of the urban population continuing, and with that the transformation of these centres into entertainment hubs alongside food and beverage,” says James Sinclair.“This is a major growth factor for our business. We see a huge contingent of younger people living in suburbs and wanting to go out locally.”As a leading hospitality business, Signature Hospitality Group’s growth strategy is focused on locating in large centres, alongside more traditional retail to create the emerging new mix of services and facilities in the contemporary Living Centre.Signature Hospitality Group already has four The Sporting Globe bars and six TGI Fridays restaurants in Scentre Group’s Westfield centres, and ultimately aims to have a presence in each of the largest Westfield Living Centres across Australia.The newest addition is the largest dedicated sports bar and grill in the southern hemisphere, which opened at Westfield Knox in outer eastern Melbourne this week.Over 1,200 square metres, The Sporting Globe at Westfield Knox will feature a restaurant and dining area plus a functions’ facility and several bars.The new venue will boast 70 screens, including a stadium style big screen central “jumbotron” over the main bar area offering a wide selection of sporting options, as well as a rooftop entertainment terrace over-looking the Knox Ozone restaurant precinct.“This new concept is set to become the flagship for our group and an example of how we develop in future,” says James Sinclair.Younger people, he says, also want to spend a larger portion of their disposable income on experiences – a demand which The Sporting Globe concept is designed to meet.The “dwell time” for The Sporting Globe customers spans after work drinks which can then develop into dinner and watching a sports game with a group of friends, after which the bar transitions into more of a “night-time economy” phase offering musicians or DJs.The gender balance of the bars is around 40 percent female and 60 per cent male, and Sinclair expects the percentage of women to increase as women’s sport continues its rise and are on display or promoted.In the US, he says, the gender mix at sports bars is close to 50/50, and the Australian trend is reflecting that.“We see sport as the number one entertainment form which people will consume in Australia,” he says.“There are more sporting codes being televised across women’s sport and international codes, so the growth in sport is enormous.”“Dwell time” is shorter at the TGI Fridays restaurants, largely because many of the customers are families with younger children, and also because customers often combine the dining experience with a number of other activities on offer within a Living Centre.

Closer to home: micro-CBDs and the emerging night-time economy

Experience by DesignAesop’s new Pitt Street store at Westfield Sydney, designed with trusted Norwegian collaborator Snøhetta, uses a mix of local sandstone and granite in what is a nod Australia’s coastal escarpments and the granite that lines the pavements of Sydney’s CBD.Visitors decompress across the set-back threshold, which unfolds into a vast chamber. Crafted by a local stonemason, Aesop says the granite’s texture is poised between the natural and the ordered.
An immense stainless steel counter with basins welcomes exploration of Aesop’s skin, hair, and body care products.Aesop’s Denise Neri says: “Located on Pitt Street’s pedestrian mall, this generous store is an opportunity to grow with Aesop’s diverse clientele. Every design decision was based on the company’s commitment to hosting customers in a considered and personalised way.”At the heart of the store, stone steps rise into an amphitheatre where visitors might see a film, or simply pause and reflect.Aesop acknowledges that as the company evolves, meticulously considered design remains paramount to the creation of each space.The Aesop store is cutting edge, and according to Rebecca Burk, National Retail Design Account Manager at Scentre Group, is an example of how a meticulous approach to design can be used to differentiate, express and curate their brand.“Aesop is well known as an Australian brand but what they do in Sydney is pick up on the context and create a very specific design for an enriched experience,” says Burk.“This is how retail can be more than about selling.“A store can be a palate to overlay a memorable experience which delights the customer, but also has a subtle impact on brand loyalty.”Burk and the retail design team at Scentre Group work alongside retailers to optimise the design of their stores and integrate them as best they can into the curated environments of 41 Westfield living centres.Their belief is that in today’s retail environment, good design is not simply about aesthetics, it’s an essential part of the contemporary customer experience.Brands are consistently raising their design standards so that their interactions with customers are not just transactions, but deliver a unique and memorable experience.“Design also has to be brand appropriate and resonate with the demographics of customers,” says Burk.
“Some customer groups might be intimidated by over engineered and over the top design, while for other brands with different customers it is a key part of what they deliver.“But the point is that retailers today understand that design is part of their toolkit, and that interiors can be highly curated and detailed down to every last gesture.”“In a living centre, you need to design that very quick transition the customer makes when they come out of the centre space and into particular stores, so that means thinking about lighting, materials which can create a transition and a contrast, and also thinking hard about the precinct they are in and working with that.“That shopfront expression is often the very first opportunity to grab a customer and make it clear what they stand for as a brand.”It is an approach embraced by specialist tea retailer T2 at its network of more than 50 stores across Australia and New Zealand.Kate Iles, the head of retail design at T2, says that with 100 teas from all over the world, T2 stores are a “passport to the rest of the world through a retail space.”“We like to think we are tea done differently, and we like to think we are retail design done differently as well,” says Iles.“We try and create a striking contrast between our bright product and an urban design, but make sure the product is the highlight of the design and the sensory experience.“The design is intended to give the customer a variety of experiences and take them on a journey, and that is how we lay them out.”In the two decades T2 has been in the Australian market, the design of its stores has also evolved.
Sustainability has increased as a brand priority and differentiator, with T2 aiming for its first Green Star rating at its new Westfield Bondi Junction store in 2020.“The rating is about T2 trying to live and breathe our sustainability message, and that goes to supporting local business and ethical practices all through the business. Green Star reflects our brand’s commitment to that through a physical store,” says Kate Iles.While customers can buy tea online, they can’t have the product sampling and experience they can get in-store, and that is why T2 has put a focus on the “theatricality” of the tasting experience and made it a design centrepiece.Reflecting the current converged retail landscape, online engagement and social media are also part of the design “toolkit” that brands are leveraging.Some brands, says Scentre Group’s Burk, have become adept in using the “Instagramability” of their stores both as a way of creating a destination, and to promote their brand to a wider audience.“Sometimes design’s second client is Instagram,” she says.“These stores provide an experience which is geared towards the customer sharing it with their wider friendship group, and incorporating that group into the experience,” says Burk.“You can’t put a price on how valuable it is when someone posts a photograph from the store.”While all brands have individual characteristics which are expressed differently, Burk says brands need to be consistent across all channels, from store design and experience through to online touch points.“This all comes down to harmony between all of the channels and a brand’s ability to deliver a seamless, connected customer experience through design,” she says.“These are all the things that great retailers understand and are delivering.”

Experience by Design

At Work in a Living CentreWhen businesses make the decision to become members of a co-working space rather than take out an office lease, many are looking outside of the central business districts of the major cities and into the suburbs where their employees and clients live.Co-working has been a big growth story in Australian business and commercial property over the last few years, and according to Office Hub, there are now 26% more co-working locations nationally than there were in 2017.According to analyst group Coworking Resources, in 2019 Australia is the sixth fastest growing co-working market in the world.“For many small and medium-sized businesses it doesn’t make sense to take out the traditional three to five year office lease,” says Stuart Brown, chief executive of WOTSO WorkSpace.“That model carries too much risk and is just not fit for purpose any more. They are looking for more flexibility.”WOTSO operates more than 15 co-working locations around Australia, with one offshore in the Malaysian capital Kuala Lumpur, and is increasingly looking at locations outside of the main central business districts as a key part of its growth strategy.“As a provider of office space to small and medium businesses we want to locate our workspaces where they are, and that is out in the regions and suburbs,” says Brown.“All the things that are attractive to businesses about being in a central business district, such as shopping, parking and transport, you can find in the major suburban shopping centres.”As part of that strategy, WOTSO is working with Scentre Group and offering co-working spaces in a growing number of Westfield Living Centres around Australia.WOTSO’s first foray into a shopping centre space was at Westfield Chermside in Queensland in July 2018. And in its first year, the space has been reconfigured three times to accommodate more and more members and it currently has a waitlist.A second, 1200 square metre WOTSO will open its doors at Westfield Woden in the ACT in early December 2019.“The proximity to services which our members want to use is the real driver for this demand,” says Stuart Brown.“In the case of Westfield Chermside, you have on-site parking, childcare, a new restaurant and dining precinct, there are major supermarkets, good coffee, a gym, doctors and bank branches – all the amenities which our members want to use before, after and during their work day.“And all this is close to where people live, and where their customers are.”Scentre Group Director Leasing and Retail Solutions, John Papagiannis, agrees: “With our population growing and ageing, urbanisation on the rise and average household sizes on the decline, we’ve seen a shift in the way our customers are looking to our centres as social and community hubs – as spaces to exchange ideas, relax, socialize, enjoy experiences and build relationships in their local communities.“We describe our centres as Living Centres because they are extraordinary places where our customers come together to socialise, shop and be entertained, and we are also seeing that co-working can be a part of that mix.“WOTSO has become a natural extension to our community at Chermside, and that interaction between retail and commercial creates a real energy and brings with it a regular flow of new and potential customers.”It is not just individual creatives and consultants or small startup businesses who are looking for this type of space, because the number of larger businesses with 15 more employees looking for flexible office space in Australia has more than doubled over 2018.WOTSO’s Stuart Brown observes that the co-working model is also attractive for more established and larger companies with bigger headcounts, and even for multi-national corporates looking for a wide geographical coverage rather than concentrating employees in one location.“Some multi-nationals might have a head office in Sydney and Melbourne, but beyond that they only need 100 desks in the WOTSO network Australia wide because they need their people to be on the ground,” says Brown.There is also synergy between the WOTSO WorkSpaces and the Westfield Living Centres which host them as tenants interact with each other by offering services, and as the WOTSO spaces are used for an increasing diversity of events.“The co-working spaces are also an amenity to other retailers in the Living Centre,” says Brown.“We’ve had product launches and meetings booked by the tenants, so there are some interesting interactions between the retail and co-working space developing and we’re sure that will gain momentum over time.”

At Work in a Living Centre

Local Heroes, Local KnowledgeWhat our community recognition and engagement program has taught us about our customers and communitiesThrough his organisation, Rap 4 Change, Ned uses a love of music to build connections with young people and help them tackle issues such as substance abuse, self-harm, bullying and racism with positive influences in music, sport and creativity.“It’s all about encouraging young people to make positive choices in their lives, and showing them it can be done,” says Ned, who was himself released from juvenile detention at the age of 17.Over in Auckland, New Zealand, domestic violence survivor Anita Hinton has created I Got Your Back Pack (IGYBP), a charity which provides backpacks filled with essential items so women and children have something of their own in a time of need.“I work as a cleaner to live and eat, but my passion is IGYBP and being a positive role model for my daughter,” says Hinton“It’s what we do that defines us, not what happens to us.”In its four years of existence, IGYPB has distributed 2500 backpacks to women in need, and has been averaging 300 a month in 2019, with packs distributed throughout NZ.Anita and Ned might work in different areas and in different countries, but one thing they have in common is that they have both been recognised as 2019 Westfield Local Heroes, Scentre Group’s community recognition and engagement program.In the outer Sydney suburb of Mount Druitt, Ned Narouz is using rap music to inspire young people who have experienced contact with the juvenile justice system.Scentre Group announced 121 Westfield local heroes today – three for each of its operating centres - all of whom will receive up to $10,000 to help their community-based organisation or project grow and thrive. Westfield Local Heroes are nominated and voted for by their local communities.Scentre Group Director, Customer Experience, Phil McAveety, said this year’s 121 Westfield Local Heroes received more than 107,000 community votes from across Australia and New Zealand.“The program is designed to discover and celebrate people who are doing great things in our communities,” he says.“And for us, it all comes back to our purpose of creating extraordinary places, connecting and enriching communities. The program recognises that our centres are that third place for people, outside of the people’s homes, workplaces or places of study and they are a social hub for our communities.”McAveety explains that each of the Local Heroes are community focused with locally based activities designed to “create a sense of inclusion.”“We often find that the causes and organisations that our Heroes are so passionate about align with the social fabric of the local community in which we are operating our living centres every day.“This means the program gives us some really valuable insights into what makes that community tick and what’s most important to our customers in that particular community.”In 2018, 117 inaugural Heroes received grants totalling $1.17 million, after 1037 nominations and over 77,000 votes cast from members of the public. Many of these 2018 Local Heroes are already noticing the impact of being recognised by the program.Paulo De Nobrega, who operates the Sutherland Titans Football Club in the Shire district south of Sydney, was one such 2018 Westfield local hero.The Titans are a team of players, all with special needs, who play regular games against association teams which have a “bye’ from regular competition.“Westfield Local Heroes has been a lifeline,” says Paulo. “We now have some financial security which is very different to previous years.”The $10,000 Local Heroes grant enabled the Titans to purchase an on-site defibrillator, along with a drinks fridge and new goal posts.Another 2018 hero was NZ-based Robyn Twemlow, who received $10,000 for her annual Camp Twitch event, which brings people with Tourette’s Syndrome together in a safe and welcoming environment.She says being a Westfield Local Hero represents “awesome acceptance” and recognition from the wider community and has been crucial in helping Camp Twitch with its growth and momentum.Robyn’s daughter was diagnosed with Tourette’s at the age of nine, and she then formed Camp Twitch to connect with others, offering a friendly ear to families and people with the Syndrome.The high point came when a boy who attended one of the camp’s nominated Robyn as his hero in a school writing exercise.“He said going to Camp Twitch was the first time he’d felt normal and not different,” says Robyn.“That really touched me and made all the hard work worthwhile.”Westfield Local Heroes entrants do not have to be registered charities. They can simply be individuals with passionate and innovative ideas for making a local contribution.The majority of nominated individuals are running small programs for which the $10,000 prize money has significantly more impact than it might have for other, larger organisations.Even if entrants are not ultimately grant recipients, they are promoted through Scentre Group’s digital assets and publicity as part of the voting process, which helps raise their profile and that of their programs, causes and activities. Research conducted with the 2018 program participants found they see high value in the promotion the program generates for their work and their organisations.Of the 2018 successful Local Heroes, 96% agree the program ‘helps community organisations grow’, and 91% agree it helps ‘connects people with services and programs they may not have otherwise known about’.Meanwhile, 98% said they experienced positive impacts, such as increased motivation, work ethic and pride, as a result of being named a Westfield Local Hero.For Scentre Group, the program is an important way to deepen engagement with its local communities and gain a better understanding of local issues.“It connects us with grassroots issues - from domestic violence to accessibility for people with disability - and gives us the opportunity to work with people to address them through our centres,” McAveety says.“That engagement then helps make our Living Centres more inclusive, welcoming and connected places for everyone.”While the work of all nominees spans a broad spectrum of social values, those causes that featured most highly in 2019 were support and networks for parents and families, people with disabilities, mental health and providing opportunities for at-risk or disengaged youth to thrive and become positive contributors to the local community. The Local Heroes program also makes a contribution to engagement among Scentre Group’s employees, where it enjoys significant support.“A lot of our people tell us that this is one of those programs that gets them out of bed and motivated,” says McAveety.“They love being a part of this, and they’re proud that we’re doing it.”For a full list of our Australian and New Zealand 2019 Westfield Local Heroes visit https://www.westfield.com.au/local-heroes and https://www.westfield.co.nz/local-heroes.

Local Heroes, Local Knowledge

“Liquid expectations” and the quest for customer obsessionIt is no longer enough for retailers to be “customer focused”. To be successful, modern retailers need to be “customer obsessed”, and this demands a more holistic understanding of customer aspirations beyond metrics around buying behaviour.This was one of the key points to come out of an industry panel discussion on the subject of “The Connected Customer Experience” hosted by the Australia Israel Chamber of Commerce in Sydney recently.Scentre Group Chief Executive Officer Peter Allen was one of the panellists and told the audience today’s customers had “liquid expectations” and made choices which were much more selective and driven by a desire for experiences than in the past.The customer desire for experience, he said, was part of a hierarchy where there was a clear step-up from expectation to experience.“Beyond the delivery of what the customer needs, it’s about craving that emotional connection. People are inherently social animals and they want that engagement, that feeling of belonging.“And we’re creating that connection by the way we’re making them feel when they’re in our living centres.“We have transformed our centres to become that third place for our customers that is as integral to their lives as their homes, workplaces or places of study. We are really becoming people’s backyards, living rooms and dining rooms,” Allen said.As much as 42 percent of the stores across Scentre Group’s platform of 41 Westfield Living Centres across Australia and New Zealand was now “experiential” and consumed on-site, and more than 14,000 events – from community celebrations to cultural performances in addition to brand-related activations – were held within its centres during 2018.In listening to the voice of its customers, Allen said Scentre Group was using technology which delivered customer feedback in “real time.”“This has really changed the mindset, and we are monitoring and using social media to start having that dialogue with what customers are thinking,” he said.To help drive that that change, Allen said Scentre Group had gone beyond understanding customers by traditional demographic segmentations.“We look at customer aspirational groups, and look at those to really understand the market,” he said.“The opportunity we have is to be able to curate that mix, and our business is to drive customer traffic to our centres and part of that is to be ‘always on.’”Customers did not think about channels as separate experiences but were demonstrating they wanted to interact with brands in multiple ways. This has seen a convergence between physical and online channels, and the two were working together.There were many examples of brands which had started as pure online plays moving into physical retailing and having success, to grow their business and customer advocacy.Also on the panel was Daniel Agostinelli, the chief executive of Accent Group, a leading footwear retailer which operates the Athlete’s Foot, Hype DC and Platypus Shoes among other brands.Agostinelli agreed that experience was critical for customers, and it began with creating the optimal environment in stores, but also in reaching out and connecting on a cultural level.“Three weeks ago, we had a music artist play and she launched a new single in a Platypus store,” he said.“I know its not new to have a band in a store, but it is new to have the launch of a new single in a store, and you can imagine what happens online after you do that.“You may not get any sales from it today, but you do get customer loyalty because they understand that we are on point, and that we understand the music they love.”The panel also discussed the world of data, and how retailers could effectively use the explosion in the volume of data to create a better customer experience.“The days of just sending an email to every single customer are gone, and just having a nice photo on Instagram, that is old,” said Agostinelli.“You need videographers to get better content to keep them involved.“If someone buys a yellow shoe it doesn’t mean the other 4.5 million customers are also going to want a yellow shoe, so you need to personalise emails.”Personalisation, he said, was a “very different space but it is moving very quickly, and that is exciting.”“But you have to invest in the curve early and grow into it, because without it we would be left behind.”The third panelist, Erica Berchtold, the chief executive of online marketplace, The Iconic, said that it was critical for her business to help customers “navigate a way through” a site which carried over 1000 brands.“It is like having signposts in a physical Westfield centre or in a store,” she said.“We have developed features that enable a customer to navigate, so for example we have follow the brand, which is like having an Instagram feed of just the brands you want to know about.“And you can look at new products, new range, and sales on those items and create a wish list board and share it with family and friends, so there’s a lot we can do to develop that emotional engagement online, but also help them have a better experience.”Berchtold said her idea of being obsessed with the customer was to over deliver.“I have never been satisfied with just giving a customer what they want,” she said.“I want to be focused on giving them what they don’t know they want yet, and that is the challenge.“It is saying ‘you don’t know what you don’t know yet but actually you are going to want that yellow shoe or that product or service.’”The panel also discussed the idea of value, and if customers were prepared to pay more for better services, such as home delivery at the hour of their choice.Peter Allen gave another example of consumers no longer comparing apples with apples when it comes to experience.“If I use the valet car park at Westfield, my expectations are not based on Westfield Valet, my expectations are based on the best hotel valet experience I’ve had globally.“That’s what we’re competing with now and we need to not only meet but exceed those expectations.”

“Liquid expectations” and the quest for customer obsession

Network Effect ResearchResearch finds half of a brand’s online sales attributed to brand exposure in their physical stores.Australian designer fashion label Bec+Bridge was founded in 2003, but it wasn’t until 2018 that the company opened its first physical store in Westfield Bondi Junction.For the first 15 years of its life Bec+Bridge was an online operation with brand representation in David Jones and selected boutiques, but as the business matured founders Becky Cooper and Bridget Yorston decided that the brand needed a dedicated physical presence.  In the past year they have grown their store presence to a further two locations, at Mosman on Sydney’s North Shore and also in Brisbane.“If you think of any fashion brand you think of the lifestyle and you think of the store experience, and I think we were missing a bit of that,” says Yorston.“Having the stores has really enhanced our brand and has helped us better understand the Bec+Bridge girl and grow customer advocacy.“The physical and the online channels work together to drive the growth of the business, and also cater for unique customer behaviours and needs as our brand’s growth trajectory drives multi-generational customer profiles.“Some customers, for example, will come into a store, try on a dress or jacket, and instead of taking it home will then order from us online, sometimes from their smartphones while they are still in-store. Others will do their research online and then go into a store and collect their purchase.”According to David Lamond, Scentre Group’s Director of Research, the Bec+Bridge customer experience is part of a wider convergence phenomenon in retailing known as the “network effect”.This is the cumulative impact of multiple physical stores, complemented by online channels, to heighten consumer exposure and awareness of the brand which inspires and motivates the customer to purchase.In the network effect, the physical store is not just a place to make a purchase. It is an advertising and marketing platform which reinforces the brand in the mind of digitally sophisticated and connected consumers who are seeking retail inspiration and fulfillment across multiple channels. And they expect the experience to be frictionless.Lamond says companies like Scentre Group are getting better at quantifying the network effect. Retailers are increasingly understanding that just because someone doesn’t purchase something when they are in the store doesn’t mean that a purchase is lost.“The network effect reflects ‘see now, buy later’ behaviour, and there is strong evidence that the presence of each store will have a positive effect on the other stores, and raise the sales of all stores,” he says.The network effect manifests in three outcomes: entering one store improves the chances a customer will buy from another location, or buy later online, while even seeing a store can be effective in generating ‘buy later’ behaviour if the store has good exposure.Scentre Group has conducted proprietary research based on whole of market transaction data which quantifies this effect.The research found that 50% of a brand’s online sales are attributable to recent exposure to their physical stores.“The research reinforces that by having the right online presence, and the more seamless and frictionless the transition between the two, the better for the brand,” said Lamond“The consumer needs constant reminders, so the more times they see the brand and are able to interact with it, the more influence it is going to have.“Sophisticated modern retailers understand that they need a holistic investment strategy where the physical and online channels can complement each other.”This has certainly been the experience for Bec+Bridge, and Becky Cooper says the stores have allowed them to have more control over the brand presentation, and how it is delivered as an experience to the specific needs of their customers.Asked for her advice for any other online brands thinking of opening a physical store, she says: “It’s only been a brand enhancing experience.“It doesn’t take away from online, it grows online and they work together.”

Network Effect Research

2019 Half Year ResultsToday we announced strong type: asset-hyperlink id: 5mCh0MHtuN75VNJpXfpdfh which demonstrate the long-term growth and sustainability of our business. We continue to enhance the most efficient platform for our retail partners to engage with their customers.Retail is a dynamic sector. It has to be – it’s a direct reflection of the consumer and their changing preferences. There is no single view of retail – it comprises many different categories and sectors and the product, service and experience mix we curate across our 41 Westfield Living Centres reflects this.We are focused on delivering what our customers want. Annual customer visitation across our portfolio is more than 535 million and growing. On average, our customers spend more than 80 minutes in our centres per visit. Occupancy is high at 99.3%.Total annual sales across our platform has increased by $1.2 billion to $24.4 billion. To put that into perspective, retail sales across our platform account for more than 7% of all retail sales in Australia. More than 90% of retail sales in Australia still takes place in a physical store and physical stores are growing in the way they influence ecosystem sales.During the half we introduced 118 new brands to our portfolio and 117 existing brands grew their store network with us. This recognises the role of highly productive physical stores in acquiring and retaining customers, building brand advocacy and influencing sales both in-store and online.About 42% of the stores across our portfolio are now experience-based offerings and can only be consumed on-site.We are excited about the future of our business and our ability to generate long-term sustainable growth. We will continue to invest in deepening our understanding of the customer and maintain our relentless focus on what they want.Here is our CEO, Peter Allen, talking through the highlights:

2019 Half Year Results

Towards the Experience EconomyWhen recently visiting Shanghai, Scentre Group’s Director of Customer Experience (CX) Phil McAveety visited the first Nike House of Innovation to open outside the US.It was, he says, an interesting merging of the physical space with digital technology but with a strong focus on personalisation.“What was most striking was that the most popular part of the store was not technology driven. It was the customisation room where you could select from eight to 10 shoe silhouettes, choose custom design and colours which were then hand painted for you,” says McAveety.“People were lining up to customise their shoes and others were lining up just to watch.”The Nike experience resonated with McAveety because in his role at Scentre Group he is driving a transformation in the customer experience strategy, away from being in the shopping centre business to being in the “living centre business.”Today’s customer, says McAveety, is demanding so much more.They are more connected, they are “always on” and they are more informed about brands and product.But they are also demanding vibrant and stimulating environments which deliver extraordinary experiences, and if they don’t get that then they – and their wallets – will go somewhere else.“It’s not enough for us any longer to be just a curator of retail and brand experiences,” says McAveety.“We really need to be a creator of overall customer experience.”Also in Shanghai, McAveety saw the latest retail concept from Starbucks, called the Starbucks Roastery, which the company describes an “immersive and dramatic expression of our passion for coffee.”Over ten times larger than a normal Starbucks, the Roastery is not just a place to roast coffee, but includes a full liquor bar, bakeries and lounge areas complete with fireplaces.“It’s really like a factory and I’ve never seen anything like it in retail,” says McAveety.“Its 2800 square metres of space and its packed from morning till night. It reinforced to us all that despite living in an increasingly digitized age, people still want to congregate in interesting, energetic locations.”The Nike and Starbucks examples both point the way forward for how retail spaces are transforming.The future of physical retailing is about delivering “retail theatre” where people go not just to buy, but “hang out, see and be seen.”“We need to be providing destinations where people choose to go to spend time, and they may shop immediately or they may not,” says McAveety.“Today it’s about creating extraordinary places, connecting and enriching communities.”In addition to being a property company in the shopping centre business Scentre Group has re-imagined what it does, and today it’s around delivering a customer experience which is not just focussed on shopping, but is more around leisure, culture and community.At the new Westfield Coomera living centre on Queensland’s northern Gold Coast, for example, more than 40 percent of the space is for non-traditional retail.There is an area called “The Backyard” which has a water play area for kids, and BBQ pits for families.“You can bring your own food, you don’t have to buy anything from the centre – although it is all there if you want to,” says McAveety.“But it’s creating that sense of community and sense of belonging.”Customers were also looking at the centres to deliver from a health and wellness perspective, and this was driving the location of gyms, spas, yoga studios and even skate parks.Last year, there were more than 13,500 events and collaborative brand activations across Scentre Group’s portfolio of 41 Westfield living centres, everything from face painting to hosting pop diva Katy Perry as she promoted her world tour.Many were also cultural events, not just Christmas but Lunar New Year, NAIDOC Week and the Islamic festival of Eid.Recently, Scentre Group partnered with Future Women to deliver Westfield Women in Conversation, an intimate event series designed to connect and inspire women, held at 11 Westfield living centres across the country.Celebrating Scentre Group’s long-term support for the growth of women’s football in Australia with the Westfield Matilda’s recently making it to the Round of 16 at the FIFA Women’s World Cup also helps connect local communities with the sport they love through memorable player experiences in Westfield living centres and exclusive opportunities at Westfield Matildas matches. It also aligns with Scentre Group’s customer base given women account for about 70 per cent of visitation across the portfolio.“Activations create the energy and this is what makes it a place that people want to be, that is interesting enough to get off your couch and come,” says McAveety.The customer focus is also about improving traditional pain points, such as parking.A research project analysed a metric called “interrupted journeys”, caused by events such as having to press the button and talk to the attendant.In 2017, 2.3 percent of all visits to Scentre Group car parks ended with the customer having to press the button, delaying their exit. And in many cases this meant the operator lifted the gate and the customer parked for free, and Scentre Group lost revenue.“We started getting under the skin of it and discovered a whole range of reasons,” says McAveety.“The cameras which read the licence plates weren’t pointing in the right direction. Some tickets weren’t on the right paper stock. We hadn’t put the speed bumps in the right place so people were speeding up so the camera couldn’t get a read.“We addressed those issues one by one, and we’re now down to below 1 percent in interrupted journeys, which is a great result for them and for us.”In the last three years, Scentre Group’s Positive Reputation and Net Promoter Scores have both risen steeply.This means that not only are customers happier, but is proof that better CX delivers commercial outcomes.“The higher you go in terms of NPS, the higher your sales are going.”“There is business delivery here, and it’s not just about doing the right thing, it’s about delivering great outcomes.“These are the two sides of the ‘yin and yang’ and we want to do both and elevating the customer experience is the key.”

Towards the Experience Economy

Physical stores leverage the last mile advantageIf they don’t buy an item in a store and take it home with them, today’s consumer has an expectation that their purchase will be delivered to them as rapidly as possible, preferably on the same day.Australian streets are full of growing numbers of couriers, all on their way to deliver everything from groceries, fashion items or white goods to consumers who have either purchased instore and arranged delivery or bought online.As expectations of same or next day delivery have risen, the economics of fulfilling from a local store have become even more compelling.According to global consultancy firm, Bain &amp; Company, most retailers, particularly the smaller ones and those with fewer fulfillment centres, are likely to see a significant cost advantage on one-day shipping by shipping directly from stores.The Bain &amp; Company research suggests a ‘ship from store’ approach could help retailers cut one-day shipping costs by up to 50 per cent.In Australia, a raft of delivery start-ups have hit the market from Shippit, Sendle, Zoom2U and Sherpa, while Australia Post has responded with its own start-up called Shipster.These providers are not only delivering items purchased online and fulfilled in a warehouse, but from a physical store which in many cases is geographically much closer to the customer’s address.This is especially the case for Scentre Group’s portfolio of Westfield living centres with 65% of the Australian and New Zealand population living within 30 mins of a Westfield centre.“In getting the item that last mile to the customer we are seeing that physical stores have a clear advantage over the pure online retailer, because that shorter distance means faster delivery,” says Scentre Group Chief Operating Officer, Greg Miles.“It is levelling the playing field between bricks and mortar retail and online retail and giving a new differentiator back to the store, because in many cases that store is much closer to the customer than the warehouse.”Last mile delivery is playing into another evolution in Australian retail: the convergence of instore and online channels to deliver a more connected customer experience.In 2019, the majority of retailers have both a physical and online presence, and many consumers seek inspiration instore before purchasing online for home delivery.Online retailing has more than doubled in Australia in the last four years and according to the Australian Bureau of Statistics now comprises around 5.6% of all sales. That means more than 94% of all retail sales are still conducted instore, with approximately 7.5% of all retail sales in Australia coming through Scentre Group’s platform of Westfield centres.Yet a less-noticed datapoint in the fast-growing area of online sales is what the ABS calls “multi-channel” retailing, defined as retailers who combine an online store with a physical store and may also use channels such as telephone ordering.ABS retail sales figures show that this category has increased from 1.8% of total national retail sales in January 2015 to 3.7%, almost double that of pure play online.This is creating opportunities both for existing and new retail brands and for the new logistics start-ups.Shippit, for example, offers its delivery services to retailers through multiple sales channels such as BigCommerce, Ebay and Shopify, but also deals directly with major retail brands Cue, Sephora, Cotton On, Kathmandu, General Pants and Temple &amp; Webster.In a business model created by the last mile retail boom, Shippit is not a traditional courier company, it is a technology platform which collaborates with a range of couriers and retailers to get purchases to customers.“We are seeing a tremendous shift toward investment in infrastructure surrounding faster and more flexible fulfilment, particularly amongst omni-channel retailers, for example, who are taking advantage of both physical and digital channels,” said Rob Hango-Zada, joint-CEO and co-founder at retail logistics platform Shippit.“The rise of new tech has also created new expectations for retailers to &quot;Uberise&quot; their fulfilment models, providing faster, cheaper delivery options that suit consumers’ daily lifestyles. Leveraging the close proximity of physical stores to customers is one way they’re doing this. It’s never been more important to get delivery right for retailers and we are working collaboratively with both infrastructure and logistics providers to remove friction,” he said.Scentre Group’s Greg Miles sees this as evidence of how technology is enabling both bricks and mortar and online retailers to deliver on the traditional retail goal of getting close to the customer, but for retailers with physical stores there is an added edge.“Getting close to the customer often refers to understanding their needs, but we can also see that being geographically close to the customer is an emerging advantage and that means having a store in reasonable proximity,” he says.“There is really no such thing as a pure bricks and mortar store anymore. Brands are using a sophisticated combination of their store networks and often several online channels including marketplaces and social media to create the next generation of retail, and the physical store has a pivotal role to play in that.”This hybrid model is being rapidly adopted in Australia. In late 2017 Woolworths rolled out its Pick Up service to over 670 stores around the country, with more than 4500 personal shoppers picking and packing groceries for customers who order online, but then come into the store for pick-up.Target has extended its “Drive Up” service, which is available in more than 3000 US stores. Target Australia’s consumers can now click and buy online and also collect in-store.The retail evolution is taking different forms and one Australian example of this is homewares brand Ikea.When Ikea recently announced it was opening a new store on Sydney’s Northern Beaches at Westfield Warringah Mall, the big news was that it will be just 100 square metres - a fraction of the size of the 30,000 square metres flagship in the city’s south west - and shoppers won’t be able to take their purchases home.The “home planning studio” will be the first of more than 30 such stores Ikea plans to open around Australia in coming years, many of them placed in shopping centres, and is the company’s response to a retail environment in which the physical proximity to the customer is a differentiator.The new stores will be a combination of these home planning studios, branded online pick up points and pop up shops. At the core of this strategy is the understanding that not everyone can make it across town to the flagship stores, and not everyone feels confident about purchasing homewares online without seeing the product.The new stores are more geographically accessible to more customers, who can then either order instore or online after seeing and experiencing the products they want to buy.For Ikea, it is about building more “touch points” to interact with customers and augmenting their do it yourself offer with added services.“In all of these examples, the themes are to know the customer, listen to them and design retail experiences around them that meet their needs,” says Greg Miles.“We are seeing tremendous innovation and diversity in retail, much of it driven by technology but not for the sake of technology. First and foremost, retailers are putting their customers at the core of everything they do.“The interesting thing about the new models is that the physical store and the human interaction and connection with products, services and experiences remains at the centre.”[1] Bain &amp; Company, Inc, Bain Retail Holiday Newsletter Issue #4 December 19, 2016.
[2] http://www.abs.gov.au/ausstats/abs@.nsf/mf/8501.0
[3] http://www.abs.gov.au/ausstats/abs@.nsf/mf/8501.0

Physical stores leverage the last mile advantage

The place for talent to thriveWe want to be the place for talent to thrive and to do that, we must continuously broaden our team’s horizons by offering them new career experiences that both challenge and engage.With that in mind, we’re pleased to share the news that we appointed Alison Pearson as our new Head of Talent and Chris Zerial as Centre Manager for Westfield Sydney.Alison, you’ve moved from a customer-facing role leading a Region in NSW including Westfield Sydney to Head of Talent, what made you take the leap?
It is a big change, and we’re lucky that as a vertically integrated business, these varied career opportunities are plentiful at Scentre Group. Having said that, the customer is at the heart of everything we do and my connection to our purpose ‘creating extraordinary places, connecting and enriching communities’ will remain paramount. Essentially, I’m pivoting my focus from a direct execution of customer experience to the retention and attraction of key talent, which is essential for us to deliver that daily customer experience.I’m passionate about supporting people to be the best they can be and my new role allows me to broaden my skills in this area, adding value to our culture and capability agenda on a company level, across Australia and New Zealand. I’m excited to talk to our people about embracing new career experiences or candidates about the opportunities Scentre Group offers, because having grown my own career within Scentre Group across two states, I have that personal experience to share.Chris, you’ve been with Scentre Group six years and have achieved a lot in that time. What has been most important to your development?
From my first Retail Manger role at Westfield Hornsby to today, I’ve always found people genuinely want to see you succeed and will help you learn, and that has been a significant part of how my career journey has evolved.During my last Retail Manager role at Westfield Bondi Junction I got involved with our Diversity &amp; Inclusion agenda and it helped me become a lot more comfortable with who I was and enabled me to focus on just getting the job done, rather than worrying about who I was at work. Having that level of support, both personal and professional, is a great benefit of our workplace culture and a big part of being the place for talent to thrive.I wasn’t expecting Westfield Sydney to be an opportunity for me so soon, but if you’re focused on the right goals then I believe opportunities come to you, and I’m glad that I’ve been given this exciting opportunity.What are you most excited about?
I’m looking forward to being involved with the proposed development at David Jones Men’s Store next year. We’re seeing a strong growth in luxury retail at Westfield Sydney and the development is going to anchor our centre as the City’s home of luxury, as well as being an iconic development within Sydney, so it’s a really exciting time to join the team and play a role bringing the development to life for customers.In the meantime, there’s a lot of different aspects to Westfield Sydney and my role as Centre Manager. I’m looking forward to being really curious and learning from the team about their challenges, our 44 million annual customers, the unique cultural diversity that it attracts and what we need to deliver to ensure we keep such an iconic global living centre the special place that our customers know it to be.

We want to be the place for talent to thrive and to do that, we must continuously broaden our team’s horizons by offering them new career experiences that both challenge and engage.

The place for talent to thrive

A Message from our ChairmanAt today’s 2019 Annual General Meeting, our Chairman, Brian Schwartz, made the following address.It has been almost five years since Scentre Group was established and our purpose has remained constant ever since: &#39;creating extraordinary places, connecting and enriching communities&#39;.This purpose has guided our culture and strategy as we have grown our business into an extraordinary platform of 41 Westfield living centres which is today the 15th largest company on the ASX by market capitalisation.We have 7 of the top 10 centres in Australia and 4 of the top 5 centres in New Zealand.Our centres are at the heart of the local communities we serve.  We are very proud of the role our centres fulfil in the lives of our customers providing the right mix of products, services and experiences they want.We were pleased to have delivered strong financial results for 2018, in line with our forecast.Our results demonstrate the quality of our platform and the successful implementation of our strategy, which continues to generate long-term earnings growth and value for our securityholders. Peter will address this in more detail in his comments.Our purpose encapsulates how we create a long-term sustainable business that satisfies the needs of diverse stakeholders including our people, securityholders, retail partners, suppliers, customers and communities.This is reflected in our Sustainable Business Framework which was established in 2015 and has four focus areas - our community, our people, our environmental impact and our economic performance.Our 2018 Sustainability Report was released this week and is available on our website. I encourage you to read it and understand the progress we are making as a responsible, sustainable business. Peter will provide some additional insights in his address.Our culture is led from the top and the values that underpin our organisation, what we call ‘our DNA’, were updated during the year.They are:
we put out customer first
we act with integrity
we strive for excellence
we succeed together
we are constantly curious
we create a positive legacyThe Board engages with our people on the most important issues for our business in a number of ways.We meet regularly with key members of the leadership team including presentations to the Board and have ongoing and open dialogue on a range of issues.  We participate in asset tours of our centres and attend development openings where possible.During 2018, the Board toured our five assets in New Zealand with a particular focus on Westfield Newmarket which at NZD$790 million, is the largest development we have undertaken.We continue to make progress on our vision to be the place where talent thrives.Our focus on leadership and diversity and inclusion has contributed to high levels of employee engagement.Diversity of experience and perspective is a recognised driver of a sustainable, high performance culture. It is also a key factor in Board succession planning.Board renewal and succession planning has always been key to our overall governance program and we had some time ago identified the need for additional property skills.  We are pleased to recommend and unanimously support the election of Steven Leigh as part of today’s business.Steve has in-depth knowledge of real estate economics and experience in retail assets. He recently retired from a 25-year long career at QIC.  We believe he will make an excellent contribution to the next chapter of Scentre Group’s growth and continued success.Retail continues to be a dynamic sector and the Board, management and our people are working hard to keep abreast of issues that may affect the Group.Given our leadership position in the sector, the pre-eminent quality of our living centres and management’s focus on adapting to the constantly evolving retail landscape, our long-term view for the business is positive.Thank you for your ongoing support of Scentre Group.Today is the occasion for some farewells.Our founding Chief Financial Officer, Mark Bloom, retires from his position today.Mark was Scentre Group’s first CFO and on behalf of the Board, I would like to thank Mark for his dedication and service to the company during its first five years of growth.I will personally miss his expertise, his calm demeanour, integrity and thoroughness. I know we will still see Mark regularly but, in the meantime, thank you Mark.Mark has passed the baton to Elliott Rusanow, who officially assumes the role of CFO from today. Elliott is a very experienced executive who knows our business and all our assets well and we look forward to working with him.I would like to talk about Steven Lowy on the occasion of his retirement from the Scentre Group Board, of which he was a founding Director.It is important that Steven’s significant contribution to Scentre Group’s formation and growth in his capacity as one of our founding directors, as well as his role as one of Westfield’s pivotal leaders and co-CEOs, is acknowledged and celebrated.I have known him for more than 20 years and I know many of you in the room and on the webcast will have worked with him and met him during his time with Westfield and Scentre Group.He is recognised as one of a handful of people globally with an unequalled knowledge of shopping centres, retail property and property assets in general.His work ethic, his attention to detail, his on-the-ground knowledge of our centres and his relentless focus is very much reflected in the business we have grown and value so much.  These are skills that make him unique.He is renowned as a visionary, for taking the Westfield brand global and for keeping technology at the forefront of all that he does.I want to express my sincere thanks for his incredible contribution and for the personal legacy he has created within Scentre Group.It would be remiss of me not to acknowledge Steven’s wife and my friend Judy who has been a wonderful supporter of Steven and indeed our company over many years. Judy, thank you for your unwavering support and all that you have done. It is a pleasure to have you here today.You will be sorely missed Steve.I would like to close today’s meeting by thanking you for your ongoing support of Scentre Group as we continue to deliver against our purpose of “creating extraordinary places, connecting and enriching communities.”

Our 2018 Sustainability HighlightsToday, we released our 2018 Sustainability Report.Our CEO, Peter Allen, reflects on our key highlights and achievements for the year.Scentre Group’s purpose has been constant since our company was established in 2014, guiding our culture and decision-making as we have grown our business: creating extraordinary places, connecting and enriching communities.As the owner and operator of 41 Westfield living centres across Australia and New Zealand, we are conscious of delivering on our purpose with a responsible business mindset and approach. This is supported by our DNA — the values that underpin our organisation.Our Sustainable Business Framework includes four focus areas: our community, our people, our environmental impact and our economic performance. It encapsulates how we create a long-term sustainable business that satisfies the needs of stakeholders, including our employees, securityholders, retail partners, suppliers, communities and customers.Whilst we have been delivering to internal targets for our people and environmental impact since we were established, this report marks the first year we have externally communicated targets for these focus areas. This reflects our efforts to be more transparent and create awareness of what we have achieved to date and clarity on our future priorities. In 2018, we achieved our target to reduce emissions intensity (based on Gross Lettable Area or GLA) by 25 per cent across our Australian operations ahead of our target year of 2025. We have updated this target to reduce emissions intensity by 35 per cent by 2025 portfolio-wide compared with our 2009 baseline.During 2018, we continued to rise to the challenge of meeting customers’ needs against the backdrop of a dynamic retail sector and ever-changing expectations. Advocacy for the experience we provide in our living centres has improved significantly, demonstrating that our focus on listening and responding to customers is delivering results.One of the strengths of our business is our vertical integration. We are able to design, build, operate and market our centres with the future requirements of our customers in mind. This end-to-end approach also reflects the way we manage risks. ‘People Protecting People’ is embedded into our culture and encapsulates how each of our teams takes responsibility and accountability for safety. I am proud of our teams in Western Australia and Queensland who were acknowledged with awards from their respective work safety authorities.Westfield Local Heroes was launched in 2018 to shine a light on the exceptional contribution many individuals make to the social fabric of our communities. Through this $1.17m community recognition and grants program, we supported 117 individuals representing diverse and valuable organisations in individual communities.Our aspiration to be ‘the place where talent thrives’ continues to drive strong Employee Engagement and retention, and our targets are focussed on maintaining this leadership position. We were proudly acknowledged by the Workplace Gender Equality Agency (WGEA) as an Employer of Choice for Gender Equality. We have built high levels of Employee Engagement and our Diversity and Inclusion strategy is gaining momentum across our company, as more leaders complete our inclusive management program and employees voluntarily engage in the activities of our working groups.On a personal note, I have continued to participate in initiatives that focus on leadership engagement to support gender equality through my role as a Male Champion of Change in the property industry. Within our company, I’m pleased to report we have no pay gap for like roles by gender and females represent 41 per cent of all people managers and 26.5 per cent at senior executive level.We reduced electricity usage across our living centre portfolio by 4.1 per cent during 2018. There are many contributing factors to this result but the most important is our people’s behaviour and local decisions to ensure our assets perform more efficiently. We have continued to invest in solar energy across our portfolio and now have a generation capacity of nine Gigawatt hours (GWh) per year.This year, we opened more than $1.1 billion worth of development works across four Australian states, creating an estimated 15,000 jobs in construction and 1,400 permanent retail roles. A key highlight was the opening of our first greenfield centre — Westfield Coomera — on Queensland’s Gold Coast.For 2019 and beyond, I know there is more we can do. I am excited about our company’s ability to remain focussed on the future, continuing to adapt to what our customers want and ensuring our centres continue to play an essential role in our customers’ lives and their communities.

Our 2018 Sustainability Highlights

Westfield Chermside named Star PerformerAddressing the Shopping Centre News Big Guns lunch in Sydney today, Scentre Group Chief Operating Officer, Greg Miles, welcomed the news that Westfield Chermside had become the first and only centre in Queensland to reach annual retail sales of over $1 billion.“It is clear that extraordinary retail is strong, vibrant and growing, with today’s results from Shopping Centre News confirming there are now six centres in Australia with Moving Annual Turnover (MAT) in excess of $1 billion,” he said.“It’s terrific to see that four of those six centres are Westfield living centres and we’re very excited that Westfield Chermside has become the first and only centre in Queensland to reach annual retail sales of over $1 billion.“We completed a $355 million redevelopment of Westfield Chermside in 2017, transforming the centre into the premium leisure destination for Brisbane’s north.“Last year, Westfield Chermside was shortlisted for the 2018 global World Architecture Awards in Amsterdam and showcased alongside developments from Miami to Shanghai and Tokyo, in education, mixed-use, hotels, hospitality, landscape and sustainability.“The centre was also awarded 2018 Queensland Retail Property of the Year by the Property Council of Australia, collecting category awards for Excellence in Food Retailing and Design.“I am also pleased to say that seven of the top 10 centres and 15 of the top 25 centres in Australia by MAT are Westfield living centres.“The strength of these results confirms that our efforts to curate a tailored mix of retail, consume-on-site, and experience offers that meet our customers’ expectations is what sets us apart,” he said.

Westfield Chermside named Star Performer

2018 Full Year ResultsToday we announced a strong FY18 result. Watch our CEO, Peter Allen, talking through the highlights.