Scentre Group (ASX:SCG) used its 2025 full-year results briefing to highlight a fifth consecutive year of earnings and distribution growth, pointing to higher customer visitation, record business partner sales, and continued leasing momentum across its 42 Westfield destinations in Australia and New Zealand.
Operating performance and customer metrics
Chief Executive Officer Elliott Rusanow said the group’s strategy remains focused on growing economic activity at each destination by attracting more people, encouraging longer visits, and broadening the range of businesses that partner with Westfield. He said the approach continues to deliver “strong operating performance with continued growth in earnings.”
Rusanow described activations and events as a key driver of visitation and “dwell time,” noting more than 21,000 cultural and community events held during 2025. He highlighted partnerships with The Walt Disney Company (in its fourth year), Sony Music (free live performances), and Live Nation (music-led experiences). The company also hosted live sites tied to the Australian Open through Channel Nine’s “Summer of Tennis” and events for the 2026 Milano Cortina Winter Olympics, following the group’s Paris Olympics activation in 2024.
Sales, leasing, and occupancy
Management said business partners achieved record sales of AUD 30 billion in 2025, up AUD 1 billion, or 3.6%, from 2024. Second-half 2025 sales growth was 4.5%. Rusanow said sales are AUD 5 billion higher than in 2019, and noted January 2026 sales growth of 5.4% versus the comparable period referenced on the call.
Leasing conditions were described as strong, with space becoming “more scarce.” The group reported occupancy of 99.8% in 2025, its highest since 2013. During the year, Scentre completed 3,090 leasing deals, with specialty rents up 4.5%.
- New lease spreads were +3.2% for 2025, increasing to +3.5% in the second half.
- The average specialty lease term was 6.8 years.
- About 80% of leases include inflation-linked annual escalations.
In response to a question, the company said specialty occupancy cost was 17.2%, and management pointed to strong specialty sales growth supporting rent growth.
Developments, redevelopments, and security posture
Scentre outlined a series of space repurposing projects aimed at increasing productivity and reinforcing Westfield’s experiential and lifestyle mix. The company completed the expansion of Westfield Sydney, including a two-level Chanel boutique, along with Moncler and Omega. It also said it downsized three additional David Jones stores to “unlock space” for redeployment to other brands.
The group completed redevelopments including:
- AUD 72 million at Westfield Southland (Melbourne)
- AUD 48 million at Westfield Broadway (Sydney), with 2025 visitation up 9.3%
- AUD 28 million upgrade of Level One at Westfield Bondi (Sydney), repurposed into health, wellness, and fitness, contributing to 2025 visitation growth of 8.5%
Rusanow also announced the start of an AUD 240 million investment at Westfield Bondi to redevelop Level 6 into a “world-leading lifestyle, entertainment, and dining destination.” On returns, he argued developments should be assessed on their impact on total site net operating income rather than a single stabilized yield on incremental spend. Asked whether double-digit unlevered IRRs were a fair expectation in a holistic sense, he said that was “absolutely the aim,” adding management would expect “healthy double-digit IRRs” looking over a 5–10 year horizon.
During Q&A, Rusanow addressed security costs and said the company adopted “world-leading security arrangements,” noting it moved quickly to improve security following the tragic Bondi Junction incident in 2024. He said those costs were already absorbed in the numbers and that NOI margin improved in 2025.
Financial results, balance sheet actions, and valuation
Chief Financial Officer Andrew Clarke reported net operating income (NOI) of AUD 2.1 billion, up 3.7% year over year, with like-for-like NOI up 4.8% (excluding the partial divestment of Westfield Chermside and the release of an expected credit charge in both 2024 and 2025). Funds from operations (FFO) rose 4.9% to AUD 1.18 billion, with FFO of AUD 0.2282 per security, which management said was ahead of guidance.
Clarke said management fee income grew 6.3%, overheads rose 2.5%, and net interest expense increased 0.6%, reflecting part-period benefits from 2025 capital management initiatives. Tax expense increased to AUD 44 million from AUD 39 million, which he attributed primarily to higher management fee income, growth in ancillary income, and higher tax on New Zealand income due to lower interest rates. Operating and leasing capital was AUD 167 million in 2025, with an expectation of around AUD 170 million in 2026.
On financing, Clarke said the group refinanced AUD 2.4 billion of senior and subordinated notes in 2025 and executed AUD 3.2 billion of interest rate swaps. Hedge coverage was 99% as at January 2026, and 82% at December 2026. The weighted average interest rate for 2025 was 5.6%, including an average base rate of 3.1% and an average margin of 2.5% (improved from 2.8% in 2024). Available liquidity stood at AUD 5.2 billion at year-end.
Following joint venturing of Westfield Chermside and Westfield Sydney that raised AUD 2.2 billion of funding, the company announced its intention to redeem $750 million (approximately AUD 1.15 billion) of 2030 senior bonds with a credit margin of 4.2%. Clarke also said the group intends to increase its investment in Carindale Property Trust, with any acquisitions subject to market conditions and the creep provisions of the Corporations Act; management later said no Carindale assumption was included in 2026 guidance and expected any buying to be gradual.
The statutory result was a profit of AUD 1.78 billion, including an unrealized property revaluation increase of AUD 456 million. All properties were revalued during the year, with valuations up 2.5% overall, driven primarily by NOI growth. The weighted average capitalization rate was 5.43% at December 2025.
Outlook and guidance
Subject to no material change in conditions, management guided to 2026 FFO growth of at least 4% to more than AUD 0.2373 per security, and distributions expected to grow 4% to AUD 0.1843 per security.
In Q&A, Clarke said the company expects like-for-like NOI growth of around 4% in 2026 and forecast a weighted average cost of debt of about 5.4% (down from 5.6% in 2025). He also noted several moving parts affecting the growth outlook, including the absence of an expected credit charge (ECC) release in 2026 after an ECC release in 2025, currency impacts from a stronger Australian dollar versus the New Zealand dollar, higher tax expense, and disruption or “loss rent” from redevelopment activity. When pressed on the magnitude, management indicated the lost rent impact could be “about AUD 10” million and possibly “10 to 15.”
Separately, Clarke said the ECC release recognized in 2025 came through in the second half and was driven by improved collections and debtor aging, allowing the group to resolve issues commercially and release prior expected credit allowances. Management said it was not assuming further releases in 2026.
On project income, Clarke said 2025 project income was approximately AUD 2 million and referenced a loss of around AUD 15 million booked in the first half of 2025 related to higher-than-expected construction costs on the commercial and residential project at 121 Castlereagh Street undertaken on behalf of Cbus Property. He said 2026 project income is expected to be relatively flat, noting the major development discussed—Westfield Bondi—is 100% owned and therefore does not generate joint venture project income.
About Scentre Group (ASX:SCG)
Scentre Group owns and operates a leading portfolio of 42 Westfield destinations with 37 located in Australia and five in New Zealand encompassing more than 12,000 outlets. Our Westfield destinations are strategically located in the heart of the local communities we serve. Our centres are considered community hubs that connect people with services and experiences that enrich their daily lives. The Trust has a joint interest in 39 Westfield destinations.
