Scentre Group lifts earnings guidance as Westfield visitation hits record highs
In its Half-Year 2026 results presentation, delivered to investors on 25 August 2026 for the six months to 30 June 2026, Scentre Group reported Funds from Operations (FFO) of $612 million, up 4.4%, and upgraded its full-year FFO guidance to at least 23.79 cents per security, representing growth of at least 4.25%.
Management highlighted record annual business partner sales of $30.3 billion and record annual visitation of 552 million customers across its 42 Westfield destinations. CEO Elliott Rusanow told investors the earnings growth was being generated by the existing business today, and was not reliant on assumptions of future stabilisation or development outcomes.
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First-half results: FFO growth and an upgraded outlook
The presentation detailed a completed six-month period underpinned by operational strength. FFO of $612 million reflected a 4.4% increase over the first half of 2025, supported by Operating Profit growth of 4.5%. The interim distribution was set at 9.215 cents per security, up 4.5%.
Based on first-half performance and subject to no material change in conditions, management upgraded its second-half FFO guidance to at least 12.06 cents per security (growth of at least 4.5%). That would take full-year FFO to at least 23.79 cents per security. Distribution guidance for the second half was upgraded to 9.258 cents per security, taking the full-year distribution to 18.473 cents per security, growth of 4.25%.
| Metric | HY2026 | Change | Investor Significance |
|---|---|---|---|
| Funds from Operations | $612M | +4.4% | Core earnings measure driving distributions |
| Operating Profit | — | +4.5% | Underlying business performance |
| Interim distribution | 9.215 cps | +4.5% | Direct income return to securityholders |
| Full-year FFO guidance | ≥23.79 cps | ≥+4.25% | Upgraded forward earnings outlook |
| Full-year distribution guidance | 18.473 cps | +4.25% | Expected annual income growth |
CEO Elliott Rusanow
“We believe investing for the future should not come at the expense of growing earnings for our securityholders today.”
How the Westfield model turns foot traffic into earnings
Management described an operating flywheel that connects customer visits to earnings. In beginner-friendly terms, the model works through a repeating sequence where more visits generate more sales for retailers, which in turn attracts more businesses seeking space.
The steps management outlined are as follows:
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More people visit Westfield destinations, more often and for longer
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Increased foot traffic supports higher sales for business partners
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Growing sales attract more businesses wanting to lease space
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That demand supports occupancy, rents and leasing spreads
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Higher occupancy and rents ultimately translate into earnings
The presentation illustrated the flywheel with figures since 2022. Annual visitation increased from 408 million to 552 million customers, an uplift of 144 million, with more than 10.5 million weekly visits across 42 Westfield destinations. Business partner sales rose from $22.9 billion to a record $30.3 billion over the same period.
Occupancy reached 99.8%, up from 98.8% at June 2022, which management noted was the highest June level in more than a decade. Earnings per security are now more than 15% higher than the year to June 2023, described as the first full year of stability following the Covid pandemic.
Visitation, sales and leasing momentum
The presentation detailed the operational drivers behind the result. Scentre Group welcomed 347 million customer visits in the first six months of 2026, 12 million more than the prior comparable period and representing growth of 3.5%. Westfield membership now exceeds 5.2 million.
Management attributed customer engagement to a range of partnerships and events. These included the FIFA World Cup “Football for Fans” experience, with SBS Fan Zones attracting 218,000 visits, and a newly announced NFL partnership as Official Shopping Destination Partner and Exclusive Red Carpet Partner. The company also hosted Disney experiences including Toy Story 5 and Star Wars events, and Sony Music live performances. A new gamified experience, Westfield World of Wins, is being launched through the Westfield App.
On sales and leasing, management reported the following:
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12-month business partner sales reached a record $30.3 billion, up 4.2%, with specialty sales up 5.4%
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First-half business partner sales grew 3.7%, with specialty sales up 5.1%
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Rent escalations increased by 5.5%
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The Group completed 1,401 leasing deals at average positive releasing spreads of 3.7%
Balance sheet reset: refinancing and lower funding costs
CFO Andrew Clarke detailed significant progress on capital management aimed at strengthening the earnings base. The Group refinanced $4.1 billion of high-cost borrowings, comprising $2.3 billion of senior notes and $1.8 billion of subordinated notes originally issued during the pandemic in 2020.
The subordinated notes tender completed in late April 2026 achieved an 89% participation rate, retiring US$1,169 million of pandemic-era debt ahead of full redemption and establishing the structural lower-cost capital base that underpins the margin improvement reported in this half.
A new $750 million, 6-year senior note was issued in the Australian domestic market at a margin of 1.2%, alongside the renegotiation and extension of bank facilities at lower margins. These transactions improved the weighted average credit margin from 2.6% at 31 December 2025 to 1.6% at 30 June 2026. The weighted average interest rate reduced from 5.7% in the first half of 2025 to 5.4% in the first half of 2026, contributing to a $58 million (14%) reduction in interest expense.
At 30 June 2026, the Group held $3.5 billion of available liquidity. Year to date, it executed $10.1 billion of interest rate swaps, taking hedge coverage to 95% at June 2026.
Clarke also referenced a transaction announced the previous day, 24 August 2026, involving the divestment of a 50% interest in Westfield Mt Gravatt for $882.5 million, at a capitalisation rate of 5.50% and a premium to book value of 3.5%. The proceeds will initially be used to repay bank debt. This reflects the Group’s approach of introducing joint-venture partners into selected 100%-owned assets while continuing to manage those assets.
The Westfield Mt Gravatt joint venture with Australian Retirement Trust, announced the day before this presentation, priced the asset at a 5.50% capitalisation rate and a 3.5% premium to book value, taking Scentre’s total third-party capital recycled to approximately $3.1 billion over 13 months.
Property valuations increased 1.6% during the half, with the portfolio weighted average capitalisation rate at 5.45%. The statutory result was a profit of $975 million, including an unrealised property revaluation increase of $478 million.
Two growth engines: destination redevelopment and 25,600 potential dwellings
Management outlined a dual pipeline spanning retail redevelopment and the residential and mixed-use land opportunity. A key distinction stressed throughout the presentation was that these future opportunities are additional to, and not required for, current earnings growth.
On retail development, the Group identified more than $4 billion of future opportunities, targeting yields of between 6% and 7% and incremental returns of between 12% and 15%. At Westfield Bondi, works are progressing on a $240 million Level 6 redevelopment set to open in stages from late Q4 2026. In Western Sydney, a $30 million redevelopment at Westfield Penrith has commenced.
On the residential pipeline, identified and progressed over the past 24 months, management detailed the following:
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The pipeline increased this year from 20,200 to 25,600 dwellings approved or in advanced planning
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More than 670 hectares of land sits close to transport and existing infrastructure
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Warringah Mall offers potential for up to 1,600 dwellings
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Eastgardens is being explored for 1,300 dwellings
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Chermside carries potential for up to 4,000 dwellings
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West Lakes has begun planning for up to 2,000 dwellings
What it means for securityholders
The presentation reinforced an investment thesis built on demonstrated earnings growth. Management noted the Group has grown earnings per security every year since 2022, delivered upgraded guidance for 2026, and holds two long-term growth avenues across its Westfield destinations and surrounding land.
Management framed the upgraded outlook as evidence that the strategy is performing today, with land opportunities positioned as additional upside rather than a dependency for near-term growth.
CEO Elliott Rusanow
“The first half of 2026 shows that strategy working.”
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