Scentre FFO Up 4.4%, Upgrades 2026 Earnings Guidance

Scentre Group (ASX:SCG) released its results for the six months to 30 June 2026, reporting Funds from Operations of $612.4 million, up 4.4 per cent, or 11.73 cents per security, up 4.0 per cent. Operating profit rose 4.5 per cent to $611.7 million, or 11.72 cents per security, up 4.2 per cent, and distributions were $481.3 million, up 4.9 per cent, or 9.215 cents per security. Statutory profit for the period was $975 million and included an unrealised property valuation increase of $478 million, with the portfolio valued at $33.7 billion as at 30 June 2026. Portfolio occupancy was 99.8 per cent, up 10 basis points on the same period last year and, the Group said, its highest level in more than a decade. The Group completed 1,401 leasing deals achieving average specialty leasing spreads of +3.7 per cent, and average specialty rent escalations increased by 5.5 per cent in the six months. Business partners achieved sales growth of 3.7 per cent for the six months and specialty sales grew 5.1 per cent, both on a constant currency basis. For the 12 months to 30 June 2026 business partners' sales grew to a record $30.3 billion, an increase of $1.0 billion on the same period last year, which the Group states as 4.2 per cent growth on a constant currency basis.

Based on its first-half operating performance and subject to no material change in conditions, Scentre upgraded its 2026 target for Funds from Operations to at least 23.79 cents per security, representing growth of at least 4.25 per cent, comprising second-half FFO of at least 12.06 cents per security. Full-year distribution guidance was upgraded to 18.473 cents per security, growth of 4.25 per cent, with 9.258 cents per security for the second half. On capital management, the Group said it announced the day before the result that Australian Retirement Trust will purchase a 50 per cent interest in Westfield Mt Gravatt in Brisbane for aggregate gross proceeds of $882.5 million, a 3.5 per cent premium to December 2025 book values, subject to Australian Retirement Trust obtaining clearance from the Australian Competition and Consumer Commission; the transaction involves the sale of a 50 per cent direct property interest for $870.0 million at a capitalisation rate of 5.50 per cent. As a result of capital management initiatives undertaken during 2026, which included redeeming its remaining pandemic-era senior and subordinated notes, issuing a $750 million six-year senior note and renegotiating and extending $1.7 billion of senior bank facilities, the Group's average debt margin reduced from 2.6 per cent at 31 December 2025 to 1.6 per cent at 30 June 2026. Available liquidity was $3.5 billion at 30 June 2026, sufficient to cover all debt maturities until the second half of 2028. Chief Executive Officer Elliott Rusanow said the potential pipeline of dwellings across the Group's strategic land holdings has increased this year from 20,200 to 25,600 dwellings that are approved or in the advanced stages of planning.