Chief Executive Officer's Letter
'I believe Scentre Group has an exciting future with opportunities throughout the business that will contribute to its long-term growth.'
I’m pleased to present the 2015 Shareholder Review for Scentre Group as chief executive officer.
The Group has had a productive first six months since its establishment in June 2014 following the successful implementation of the restructure. It’s gratifying to note that Scentre Group’s performance during this period has met the forecasts we articulated at the time of the merger between Westfield Group’s Australia and New Zealand operating platform and shopping centres, and Westfield Retail Trust. The Group’s high quality portfolio has delivered excellent sales productivity, continued growth in average rents and near-full occupancy for more than 20 years.
The creation of the new entity has allowed our senior management team to focus exclusively on opportunities in Australia and New Zealand with the largest vertically integrated property platform in these markets.
With $40.9 billion of assets under management and an Australian portfolio of which 75% delivers more than $500 million in annual sales Scentre Group is uniquely positioned to generate strong long-term growth and risk-adjusted returns.
Our strategy is to own interests in the highest quality regional shopping centres in Australia and New Zealand, and to invest in these assets through redevelopment opportunities, ensuring that the Group’s shopping centres continue to enrich communities by providing extraordinary retail spaces for our retailers and shoppers.
We intend to achieve our objectives in a number of ways.
By concentrating on the operating performance of our shopping centres through ongoing portfolio review and the development of long-term asset plans, we will aim to ensure that our malls continue to be the best in the market. Scentre Group will invest in its assets through redevelopment opportunities at attractive total returns to deliver shopping centres that are truly extraordinary spaces for retailers and shoppers. We have identified a future development pipeline in excess of $3 billion and currently have $1.3 billion worth of projects underway.
A dynamic environment is a hallmark of the retail sector and this has held true for 55 years of Westfield shopping centres in Australia. New retail formats, new categories and new operators in the market have been a constant for an industry that must always meet the evolving demands of shoppers. As mall owners our goal is to create and curate space that allows retailers to be showcased to the fullest effect, integrating food, fashion, entertainment and leisure in a context that meets unique local needs.
Ours is a modern-day market place that should seamlessly connect retailers and shoppers and that means having the right retailers in the right location in the right shopping centre.
A continued focus on the physical shopping experience will be enhanced by a number of new projects in the digital space. During 2015 we will roll out a state-of-the-art wi-fi network at 21 centres. The service will be fast, free and easy to use - and available to all shoppers, providing them with a new level of digital connectivity and the opportunity to receive customized content.
In the year ahead Scentre Group will also bring in-house the in-centre advertising network of its Australian portfolio. We are currently building a new national SmartScreen network with over 1,200 custom-designed, integrated digital screens. The screens will add to the existing large-format digital ‘spectacular’ screens infrastructure that has proven so successful with advertisers in recent years, and will provide Scentre Group’s retail and brand partners with a new, sophisticated channel to connect with the Westfield shopper.
I believe Scentre Group has an exciting future with opportunities throughout the business that will contribute to its long-term growth.