westfield
Scentre operates 42 shopping centres under the Westfield brand across Australia and New Zealand. Image – Canva
  • Impacted by a $4.25 billion valuation reduction
  • Good news included the Group still made an operating profit
  • As of 31 December, 98.5% of the portfolio was leased

Scentre Group, the shopping centre operators under the Westfield banner in Australia and New Zealand, have released there results for the full year ending 31 December 2020.

Overall, the group reported a statutory loss of $3.73 billion.

A large player in this was revaluations which hit the group particularly hard.  There has been a $4.25 billion reduction in the value of Scentre’s Australian and New Zealand portfolio.

There was a plunge in rent collections, especially during the first half of the 2020 calendar year. Only 28% of gross rent was collected in April with 35% in May. To put this into perspective, every other month last year saw gross rent collection levels above 80% with many in the 90% plus region.

However, in some good news, Scentre still recorded an operating profit of $763.4 million, although overall there was still a 42.5% decrease in its annual earnings.

Other good news included that demand for space across Westfield Centres remain strong with the entire portfolio being 98.5% leased as of 31 December 2020 – 2,652 lease deals were done during the year with 848 of these being new merchants.

Scentre operates 42 Westfield Centres across Australia and New Zealand. Sydney has by far the most of any city with 15 Westfield centres.

Despite the pandemic, 37 million customers visited their centres on average each month – with this figure increasing for the December quarter with 46 average monthly visitors.

April, amid the maiden wave of the pandemic, saw only 16 million customer visits.

Unsurprisingly, December had the most visits with 56 million however second place was February with 51 million – extraordinary considering this was the eve of the global fall of the pandemic.

The group added they did not receive any financial support from either the Australian or New Zealand governments – including Australia’s JobKeeper program.

“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,” said Peter Allen, Scentre Group CEO.

“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.”

Mr Allen also commented that every Westfield Centre remained open every day last year. On top of this and despite the pandemic, customers on average still spent one a half hours per visit to a centre.

The group is optimistic about 2021 and expects to distribute a 14 cent per share dividend, which comes after withholding interim 2020 distributions and a 7 cent dividend in the final half.

Scentre Group had a rollercoaster day on the stock market with a high of $2.92 and a low of $2.80 before closing at $2.84 – down 1.05%.  The price is yet to reach pre-pandemic highs with the 52-week high of $3.73 during the beginning of the pandemic-induced crash, but well above the 52-week low of $1.35.

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