Scentre Group (ASX: SCG) reported a 4.4% rise in funds from operations (FFO) to $612.4 million for the six months ended June 30, 2026, as record retail traffic and strong leasing activity offset portfolio adjustments. The company, which owns and operates 42 Westfield shopping centres across Australia and New Zealand, also upgraded its full-year guidance following the results presentation on August 24.
Customer visits climbed 3.5% year-over-year to 347 million in the first half, while the moving annual total reached 552 million, an 18 million increase from 2025. Chief Executive Elliott Rusanow highlighted a 35% rise in annual visitors since 2022, attributing the growth to improved customer engagement and expanded retail offerings. Portfolio occupancy rose to 99.8%, the highest June level since 2013, supported by 1,401 leasing deals completed during the period.
Funds from operations totalled $612.4 million, up from $586.6 million in the prior comparable period, while operating profit increased 4.5% to $611.7 million. Distributions to security holders rose 4.9% to $481.3 million, or 9.215 cents per security. Statutory profit reached $975 million, including $478 million in unrealised property revaluation gains. Net operating income declined 2.7% to $1.01 billion due to asset mix changes and the Westfield Mt Gravatt joint venture transaction.
Net interest expense fell 14% to $356.8 million, aided by the redemption of $2.3 billion in senior notes and $1.8 billion in subordinated debt. Gearing stood at 35.5%, with total senior borrowings of $11.9 billion as of June 30. The weighted average interest rate on total funding improved to 5.4%, down from 5.7% a year earlier, while available liquidity remained at $3.5 billion.
Scentre Group upgraded its full-year FFO guidance to at least 23.79 cents per security, representing 4.25% growth, with second-half FFO guided to at least 12.06 cents. Distribution guidance was raised to 18.473 cents per security, a 4.25% increase, with second-half distributions projected at 9.258 cents. The company also reaffirmed its weighted average cost of debt guidance of around 5.4% for the year.
Capital management included a $882.5 million capital raising through a joint venture with ART for a 50% stake in Westfield Mt Gravatt, while the development pipeline expanded to $4.0 billion in retail opportunities, targeting yields of 6-7%. Residential development potential rose to 25,600 dwellings, with planning proposals lodged for 21,500 and approvals secured for 4,100. Major redevelopments, including the $240 million Westfield Bondi project, are scheduled to open in stages from the fourth quarter of 2026.
