Company Interview / Scentre’s property play goes beyond the shopping centre

Key points:

Upgraded FFO guidance supported by record visitation, high occupancy and rent growthStrategy centres on experience-led destinations driving resilient partner sales and earningsLarge embedded housing pipeline on existing Westfield land seen as a second growth engine

Elliott Rusanow, the CEO of Scentre Group, states that upgraded full-year funds from operations guidance reflects strong momentum across the Westfield portfolio in Australia and New Zealand. He points to record annual customer visits of 552 million, equivalent to about 10.5 million visits a week, occupancy of 99.8% and rents escalating around 5.5% as key drivers of earnings and distribution growth, despite higher-for-longer interest rate concerns and cost-of-living pressures.

Rusanow argues that the market underestimates the resilience of the Westfield model, which is positioned around activation, experiences and longer dwell times rather than pure retail spend. He highlights first-half retail sales growth of more than 5% for business partners and ongoing demand for space as support for a sustained earnings growth trajectory. A long-established strategy of bringing more people more often and for longer is presented as the core engine of value creation.

A second long-term growth pillar, according to Rusanow, is a housing pipeline of more than 25,000 potential dwellings on 670 hectares of owned, well-located land, with projects flagged at Westfield locations such as Bondi, Penrith, Tuggerah and Mount Gravatt. He sees selective joint ventures, including the 50% sale of Westfield Mount Gravatt to Australian Retirement Trust, as capital recycling rather than dilution.