Scentre Group Reports 3rd quarter update with 5.9% growth in specialty sales for the nine months to 30 September 2015

Scentre Group (ASX: SCG) today announced its third quarter operational update for the 9 months to 30 September 2015, with the Group’s operations continuing to perform well.

Mr Peter Allen, CEO, said: “2015 will be Scentre Group’s first full year of operations as an independent entity, and the Group is undertaking a number of initiatives that demonstrate our commitment to creating extraordinary places connecting and enriching communities.

“Scentre Group has delivered continued strong portfolio performance, commenced $830 million of development starts in 2015, introduced several new technology initiatives and reallocated capital to higher quality assets.”

Operational Performance
As at 30 September 2015, the portfolio remained more than 99.5% leased, and had specialty sales growth of 5.9% for the nine months and 5.4% for the quarter. In particular, the Footwear, Leisure, Jewellery and Technology and Appliances retail categories have performed well over the period. The strong growth in specialty sales for the period outpaced the growth in specialty store rents, and reduced specialty store occupancy cost to 17.9%.

In Australia, average specialty retail sales increased to $10,666 per square metre and comparable specialty store sales growth was 5.8% for the 9 months to 30 September 2015. In New Zealand, average specialty retail sales increased to NZ$10,534 per square metre, and comparable specialty store sales growth was 6.5% for the nine months.

The Group is focused on curating the right retailers in our centres and preparing our assets for the future development pipeline that is in excess of $3 billion. For the nine months, re-leasing spreads were down 2.5%, an improvement from a year ago when re-leasing spreads were down 4.2%. Comparable NOI growth for the 12 months to 31 December 2015 is expected to be at the high end of the guidance range of 2.0-2.5%.

Development Activity
The Group has commenced $830 million of developments in 2015 (SCG share: $583 million), creating additional value for the business with development yields in a target range of 7.0-7.5%. These starts include new projects at Westfield Chatswood, Hurstville, North Lakes, Kotara, Casey and Warringah. These projects are focused on expanding the food, dining and entertainment precincts, as well as introducing new domestic and international retailers that will resonate with the local community. The developments continue to progress well, with the projects at Westfield Hurstville, Chatswood, Kotara and North Lakes on track to have openings prior to Christmas this year.

Scentre Group’s $670 million design and construction project being undertaken at Pacific Fair continues to make good progress.

Outlook
Scentre Group reconfirms its forecast FFO of 22.5 cents per security, representing 3.5% growth with a distribution forecast of 20.9 cents per security for the twelve months ending 31 December 2015.

Scentre Group (ASX Code: SCG) is the owner and operator of Westfield in Australia and New Zealand employing approximately 2,700 staff in Australia and New Zealand. Scentre Group has interests in and operates 43 centres located in Australia and New Zealand, encompassing approximately 12,100 retail outlets and total assets under management of $40.7 billion.

Non IFRS financial information has not been audited or reviewed.

This release contains forward-looking statements, including statements regarding future earnings and distributions that are based on information and assumptions available to us as of the date of these results.  Actual results, performance or achievements could be significantly different from those expressed in, or implied by, these forward looking statements.  These forward-looking statements are not guarantees or predictions of future performance, and involve known and unknown risks, uncertainties and other factors, many of which are beyond our control, and which may cause actual results to differ materially from those expressed in the statements contained in this release.  You should not place undue reliance on these forward-looking statements.

Except as required by law or regulation (including the ASX Listing Rules) we undertake no obligation to update these forward-looking statements.

For further information please contact Julia Clarke on +61 2 9358 7426.