Scentre Group Lifts Half-Year FFO 4.4% and Upgrades Full-Year Guidance

Scentre Group lifts half-year FFO 4.4% and upgrades full-year guidance

In its half-year results for the six months to 30 June 2026, Scentre Group delivered Funds From Operations (FFO) of $612 million (11.73 cents per security), up 4.4%, while distributions rose 4.9% to $481 million (9.215 cents per security).

The Group upgraded its full-year 2026 FFO target to at least 23.79 cents per security, representing growth of at least 4.25%, alongside an upgraded full-year distribution of 18.473 cents per security, up 4.25%.

Statutory Profit for the period reached $975 million, including an unrealised property valuation increase of $478 million. As at 30 June 2026, the Group’s portfolio was valued at $33.7 billion (SCG share).

For income-focused REIT investors, the combination of earnings growth and an upgraded outlook signals confidence and operating momentum across the Westfield business.

Half-year financial results at a glance

The table below summarises the Group’s key financial metrics for the six months to 30 June 2026 against the prior corresponding period.

While net operating income optically declined 2.7%, the strong FFO and Operating Profit growth was driven primarily by lower net interest costs.

Record visitation and sales across the Westfield portfolio

The Group recorded strong operational performance across its 42 Westfield destinations, with visitation and sales reaching record levels during the period.

• 347 million customer visitations YTD, up 3.5% (+12 million on the prior comparable period)

• 552 million annual customer visits (MAT), up 3.3% (+18 million), a record for the business

• Business partner sales (MAT) of $30.3 billion, up $1.0 billion; specialty sales up 5.4% over 12 months on a constant currency basis

• Portfolio occupancy of 99.8%, the highest level since 2013 (+10bps)

• 1,401 leasing deals completed, with average releasing spreads of +3.7% and rent escalations of +5.5%

• Westfield membership grew to 5.2 million, up 11%

CEO Commentary

“We are focused on attracting more people, more often and for longer to our destinations and continue to deliver strong performance,” said Elliott Rusanow, Chief Executive Officer. “So far this year, we have welcomed 347 million customer visitations, an increase of 3.5% or 12 million on the prior comparable period. We have attracted 552 million customer visits to our 42 Westfield destinations over the past 12 months which is a record for our business.”

High occupancy, positive releasing spreads and rising sales together underpin the sustainability of the Group’s rental income growth.

What Funds From Operations means for REIT investors

Funds From Operations (FFO) is the cash-earnings measure that Real Estate Investment Trusts (REITs) use in place of statutory profit. It strips out non-cash items such as property revaluations, providing a clearer view of the recurring earnings a property portfolio generates.

This explains why SCG’s Statutory Profit of $975 million differs so significantly from its FFO of $612 million. The $478 million unrealised valuation uplift is included within statutory profit but excluded from FFO. Because distributions are funded from FFO rather than statutory profit, FFO remains the key metric for income-focused investors assessing a REIT’s ability to sustain and grow payouts.

$882.5 million joint venture and lower funding costs

The Group announced that Australian Retirement Trust (ART) will purchase a 50% interest in Westfield Mt Gravatt in Brisbane for $882.5 million, subject to ART obtaining clearance from the Australian Consumer and Competition Commission (ACCC).

The transaction involves the sale of a 50% direct property interest for $870.0 million at a capitalisation rate of 5.50%. The aggregate $882.5 million of gross proceeds represents a 3.5% premium to book values at December 2025. This extends the Group’s relationship with ART, following their 19.9% interest in Westfield Sydney for $864 million at a capitalisation rate of 4.69%.

The Westfield Mt Gravatt joint venture brings Scentre’s total announced third-party capital through asset recycling to approximately $3.1 billion over the past 13 months, confirming the strategy as a repeatable and institutionally validated pillar of the Group’s capital management program.

During the half, the Group executed a series of capital management initiatives:

1. Redeemed US$1.5 billion ($2.3 billion) of senior notes

2. Redeemed US$1.3 billion ($1.8 billion) of remaining COVID-era subordinated notes

3. Issued a $750 million 6-year senior note in the Australian domestic market

4. Renegotiated and extended $1.7 billion of bank facilities at lower pricing

As a result, the Group’s average debt margin reduced from 2.6% at 31 December 2025 to 1.6% at 30 June 2026. The Group held available liquidity of $3.5 billion, sufficient to cover all debt maturities until the second half of 2028, with interest rate hedging at 95% as at June 2026.

Lower funding costs directly support earnings growth, while the joint venture crystallises value at a premium to book and recycles capital for reinvestment.

Investors exploring how each of these capital management steps combined to produce the 100 basis point margin improvement will find our detailed coverage of Scentre’s funding margin reduction traces the sequence from subordinated note settlement through to the revised hedging profile for 2027 and 2028.

Strategic land holdings and residential pipeline

The Group’s Westfield destinations are located on more than 670 hectares of strategically located land, close to major transport hubs and existing infrastructure. This land base represents a longer-term value-creation lever beyond core retail earnings.

Over the past year, the potential dwelling pipeline increased from 20,200 to 25,600 dwellings that are approved or in advanced stages of planning. Key projects identified include:

• Westfield Warringah Mall, with potential to deliver up to 1,600 dwellings

• Westfield Eastgardens, exploring up to 1,300 dwellings

• Westfield Chermside, with a master plan submitted for up to 4,000 dwellings

• Westfield West Lakes, with potential for up to 2,000 dwellings

Alongside the residential pipeline, the Group progressed active retail redevelopments, including the $240 million Westfield Bondi project (opening in stages from late Q4 2026), plus repurposing works at Westfield Penrith and Westfield Tuggerah.

Upgraded outlook for full-year 2026

Based on the Group’s operating performance in the first half of 2026, and subject to no material change in conditions, the full-year FFO target was upgraded to at least 23.79 cents per security, representing growth of at least 4.25% for the year.

Distribution guidance for the full year was upgraded to 18.473 cents per security, up 4.25%, comprising 9.215 cents for the first six months and 9.258 cents for the second half.

Outlook Commentary

“Our strategy is to grow the economic activity at our Westfield destinations, broaden the businesses that partner with us and unlock growth from our strategic land holdings,” said Rusanow. “This is expected to continue to deliver sustainable long-term growth in earnings and create significant long term value.”

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