Scentre Group upgraded full year 2026 guidance following solid first half results, projecting FFO of at least 23.79 cents per security representing growth of at least 4.25% over the prior year. The upgrade follows H1 FFO of $612 million, up 4.4%, and reflects management confidence in continued momentum across the Westfield portfolio of 42 retail destinations.
The earnings growth is supported by distributions that also expanded 4.9% to $481 million in the half, or 9.215 cents per security. H2 distribution guidance was upgraded to 9.258 cents per security, implying full year distributions of 18.473 cents, up 4.25% on a comparable basis. This consistency between FFO and distribution growth signals sustainable earnings rather than a one-off benefit, which matters for income investors evaluating the capital returns profile of the REIT.
Underlying this earnings strength is meaningful traffic growth. Scentre welcomed a record 552 million customer visits to its destinations over the past 12 months, representing 3.5% growth in the first half alone. This translates to improving retail sales, with business partners generating record sales of $30.3 billion for the 12 months to June, up $1.0 billion or 4.2%, while specialty sales growth accelerated to 5.4%. July sales data shows momentum continuing, with total business partner sales up 2.7% and specialty sales up 3.6% on a comparable basis.
The tightness in the leasing market is evident in occupancy metrics and rental reversion. Occupancy reached 99.8%, the highest level in more than a decade and up 10 basis points year on year. The company completed 1,401 leasing deals at average releasing spreads of plus 3.7%, while rent escalations jumped 5.5% in the half. These metrics demonstrate landlord pricing power remains robust and that demand for space in premium destination retail continues to outstrip supply.
The portfolio valuation of $33.7 billion reflects the quality of the income base, but investors should focus on the company’s stated objective to create additional value from substantial landholdings. Chief Executive Elliott Rusanow emphasised this strategy in the commentary, though details remain limited. The potential to unlock land value represents upside optionality, though execution risk applies. This announcement has been flagged as price sensitive and is material to the ASX.
View the full ASX announcement (PDF)
About Scentre Group Limited (ASX: SCG)
Scentre Group Limited owns and operates 42 Westfield shopping destinations across Australia and New Zealand, encompassing approximately 12,000 retail outlets. The company’s primary income is derived from rental revenue from its shopping centre portfolio, which includes seven of the top ten malls in Australia by sales turnover and four of the top five in New Zealand. The company also generates management fees from managing properties and development projects for capital partners.
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