Scentre Group has seen visitor numbers at its Westfield shopping centres climb by almost 10 per cent as it adds experiences such as Disney pop-ups, Barbie fan events and live music to keep customers lingering for longer.
The country’s largest retail landlord said customer visitations across its 42 shopping centres rose 9.8 per cent to 314 million in the first six months of the year, compared to the June half in 2022. Its centres are 99 per cent occupied, with 1576 new leases inked in the past six months.
“This has been driven by our unique customer activation program, including our partnerships with Disney and Netball Australia, to create extraordinary experiences for our customers at our Westfield destinations,” Scentre chief executive Elliott Rusanow said.
With sales in the malls’ traditional apparel and homewares shops moderating, the company on Tuesday announced a new partnership with concert promoter Live Nation to bring live music performances with artists such as Jessica Mauboy, Kate Ceberano and Mallrat into its centres.
“We will continue our focus on creating destinations where people want to spend their time, enabling more businesses and brands to connect with more customers,” Rusanow said.
The latest push into experiences comes after Scentre reported record sales of $27.8 billion for the June half, up 21.6 per cent from a year ago. Its funds from operations – the more accurate measure for property trusts as it excludes one-off items such as property revaluations – rose 1.5 per cent to $556.6 million.
Reported net profit fell 68.9 per cent to $149.4 million after the company wrote down the book value of its properties by $392.5 million.
ASX-listed Scentre has a market value of $13.7 billion, with 12,000 tenants across its Australia and New Zealand shopping centre portfolio and a development pipeline of $4 billion, including the expansion of Westfield Parramatta in Sydney’s west and Westfield Doncaster in Melbourne’s north-east.
There have been 125 new brands introduced across the centres with a focus on dining, interactive “experiences” such as JD Sports and the booming athleisure categories, the company said.
This is evident in the newly revamped Knox Centre in Melbourne, which has a new recreation precinct including a full-sized, FIBA-grade basketball court and a nature-inspired outdoor kids play area. In Parramatta, there will be a focus on luxury brands, still one of the fastest-growing retail segments.
Scentre’s $300 million-plus Sydney development with Cbus property at the former David Jones menswear store on the corner of Market and Castlereagh Streets is getting closer to completion and will also focus on luxury with four floors of high-end fashion and accessories, the company said.
UBS analyst Grant McCasker said the health of the Scentre portfolio is “robust with improving occupancy”.
Retail sales at its centres continued improving over the June half, despite rising costs of living. Total retail sales at Scentre’s malls rose 9.1 per cent from the same time last year and were up 13.6 per cent on the June half in 2019.
In a category breakdown, specialty sales were 7 per cent higher compared to the same period in 2022 and 18.5 per higher compared to 2019.
Sales growth at supermarkets led the charge with 10 per cent, followed by discount department stores at 6.6 per cent and department stores at 3 per cent.
The biggest sales generators though were dining, health, beauty, leisure and sports tenants, reflecting the demand by customers for a quick hit with a new lipstick or a nice meal.
Scentre declared an interim distribution of 8.25¢, payable on August 31 and forecast a full-year payment of “at least 16.5¢, representing at least 4.8 per cent growth for the year”.
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Source: Thanks smh.com