Scentre Upgrades Annual Profit, Distribution Guidance

By David Winning

SYDNEY--Scentre reported a 25% rise in half-year profit and raised its annual guidance, signaling confidence that elevated cost-of-living pressures won't materially affect tenant behavior and demand for space in its Australian malls.

Scentre expects funds from operations--a smoothed measure of operating cash flow that excludes depreciation, amortization and gains on asset sales--of at least 23.79 Australian cents (17.01 U.S. cents) per security in 2026. The guidance suggests minimum growth of 4.25% on the 22.82 cents achieved in 2025.

Scentre, which owns and operates 42 Westfield branded shopping centers, also raised its annual distribution forecast to 18.473 Australian cents per security this year, which would be 4.25% higher than the 17.72 cent payout in 2025.

The outlook was provided by Scentre alongside a net profit of A$974.5 million for the six months through June, up from A$782.2 million a year earlier. It said first-half funds from operations were 11.73 Australian cents per security.

Scentre has been watchful about the impact on its business of the conflict in the Middle East, which has driven up fuel prices and reignited inflationary worries that led the Reserve Bank of Australia to raise interest rates three times this year.

Australia's central bank recently pointed to signs that consumer spending growth is slowing, while saying the jobs market has loosened a little. House prices have also fallen in several major cities, which is an indicator widely watched by economists due to the so-called wealth effect that determines whether consumers are confident buying big-ticket items or discretionary products.

Still, Scentre signaled on Tuesday that positive momentum has continued into July. It said total business partner sales were 2.7% higher and specialty sales were 3.6% higher than the prior corresponding period1.

"We continue to see strong demand for space in our destinations with occupancy remaining at its highest level in more than a decade of 99.8%, up 10 basis points compared to the same period last year," Chief Executive Elliott Rusanow said.

Key operational metrics stayed strong or improved in the first half of the year. Rent escalations increased by 5.5%. It had positive average releasing spreads of 3.7% in the period.

Scentre's gearing--a measure of its debt relative to equity--stood at 35.5% at the end of June, compared to 30.4% at the end of December. Management has been actively strengthening the balance sheet, including reducing the funding margin and restructuring interest-rate hedging to increase coverage over the next two years.

Late Monday, Scentre said it has agreed to sell a 50% stake in the Westfield Mt Gravatt mall in Brisbane to Australian Retirement Trust in a deal with A$882.5 million.

Write to David Winning at david.winning@wsj.com

(END) Dow Jones Newswires

August 24, 2026 19:06 ET (23:06 GMT)