Company Interview / Scentre Group forecasting retail therapy to defy rate hikes

Key Points:

Scentre Group (ASX:SCG) reports funds from operations up 5% to $1.19 billionCustomer visits reach 540 million, driving $30 billion in annual salesDistributions guided to grow by 4% in 2026 to 18.4 cents per securityEnhanced security and experiential strategies underpin continued earnings and traffic growth

Scentre Group (ASX:SCG) has reported a near 5% rise in funds from operations to $1.19 billion for FY25 and a statutory profit of $1.78 billion. CEO Elliott Rusanow highlights that 540 million customers visited Scentre Group shopping centres over the period, representing a 2.7% increase year-on-year. Distributions rose to 17.7 cents per security, up 3.4% from 2024, with guidance for 2026 projecting further growth to 18.4 cents—a 4% increase. Rusanow sees the group outperforming peers, marking five consecutive years of earnings growth, driven by high occupancy rates (now at 99.8%) and continued demand from retail partners.

Rusanow credits strong sales, which totalled $30 billion in FY25, to the group’s focus on engaging activations and partnerships. January sales grew by 5.4%, and customer traffic continues to rise despite modest interest rate hikes. Scentre Group’s "free entertainment" proposition and experiential offerings, such as events and collaborations with brands like Mecca, form the backbone of its success. Now, 45% of space is allocated to businesses delivering on-site experiences, supporting resilience against the rise in online shopping.

On security, Rusanow notes significant upgrades since the 2024 Bondi centre attack, including improved protective gear and enhanced staff training. He emphasises the critical role of customer safety to long-term business growth.