Westfield owner Scentre has upgraded its outlook as shoppers come back

Scentre Group CEO Elliott Rusanow.

Westfield mall owner Scentre says it is benefiting from the work from home phenomena and new laws that could enshrine workers’ rights are simply codifying existing practices, despite concerns they will cut into productivity.

Scentre delivered an upbeat interim result as customers poured into malls in the first half, with the momentum continuing in the last month-and-a-half, partly on the back of interest rate cuts and the strong jobs market.

Scentre chief executive Elliott Rusanow said the company saw good momentum over the past three months, with visitation and spending rising. “There’s been the interest rate moves … tax (cuts) have come into effect,” he said.

But the company’s confidence partly comes from longer-term shifts. Workers are staying closer to its malls for longer during the working week than they did in the past.

Mr Rusanow said the company had adapted to the shift by putting work spaces into its centres.

“I would say our business is the beneficiary of work from home and the changes. But the reality is that the work from home changes are effectively codifying what is already happening,” he said. “We’re seeing that through the use of our destinations where people can actually work from, and we’re facilitating that.”

The mall owner is also riding the shift towards lifestyle services, with these categories and luxury performing strongly. Scentre called out its revamp of parts of Bondi Junction, saying it would remain the top fashion destination in Sydney, even as rival Vicinity Centres has lured LVHM to Chatswood Chase.

Shoppers walk past a Chanel store in Westfield Bondi Junction, Sydney.

The shift towards new retailers is happening fast. Mr Rusanow said tenants that were crucial 20 years ago were “not necessarily the anchor of today”. He cited the wellness offering coming to Bondi Junction as now being critical to the centre.

“There’s probably a lesser reliance on the traditional majors than there has been in the past. We know we’ve seen that dynamic with department stores,” he said. “I believe we’re seeing that dynamic now emerge with supermarkets, and our focus is on repurposing space to make sure it is something that people want to come to.”

The company also flagged its desire to undertake housing developments at its major sites. It has been working with governments in order to accelerate approvals and has won initial planning consents at Warringah Mall and Hornsby in Sydney, and Belconnen in Canberra.

The company flagged that it would like to be the developer of these sites and would look to find capital partners to back its ambitions in coming years.

“What we are particularly focused on … is sourcing of capital so we don’t burden our own balance sheet. But even more importantly, it’s making sure it’s done in a way which actually is sympathetic to the operations of our destination, rather than being a completely separate parcel that has no relationship to what is our main business,” Mr Rusanow said.

Scentre upgraded its outlook for this half after turning in strong interim results, in which funds from operations lifted by 3.2 per cent to $587m. The result equated to a 3.2 per cent lift in FFO per security to 11.28c, and distributions were up 2.5 per cent to 8.815c per security.

The group reconfirmed its target for FFO is 22.75c per security for 2025, representing 4.3 per cent growth for the year. Distribution guidance for the second half of 2025 has been upgraded to 8.905c per security, showing 3.5 per cent growth over the prior corresponding period.

Scentre’s profit for the half was $782m and includes gains on its portfolio of $177m. At the end of June, the group’s portfolio was valued at $34.7bn.

Mr Rusanow said more than 340 million customer visits were made to the company’s 42 Westfield malls, an increase of 3 per cent, or 10 million more visits, compared to the same period last year.

“Our business partners achieved record sales of $29.3bn in the 12 months to 30 June, 2025, an increase of $719m on the same period in 2024. This is approximately $5bn more sales generated through our destinations than in 2019,” he said.

Scentre Group CEO Elliott Rusanow.

Portfolio occupancy hit 99.7 per cent at June 30, the highest level since 2017. “We are seeing this strong performance continue, with total business partner sales for July up 5 per cent and speciality sales up 6.1 per cent on the same period last year,” Mr Rusanow said.

Average speciality rent escalations increased by 4.5 per cent and new lease spreads were 3 per cent during the first six months of 2025.

Scentre securities were up 2.6 per cent at $4.10 on the ASX at lunchtime on Tuesday.