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- Shopping Centres Australasia Property Group (SCP) has seen a 14.1 per cent increase in net profit over tax for H1 FY21
- The real estate investment company recorded net profit after tax of $102.9 million, driven by an increase in the value of investment properties
- Pleasingly, funds from operations (FFO) and adjusted funds from operations (AFFO) have improved as the negative impact of COVID-19 lessens
- FFO was up 16.1 per cent over H2 FY20 to $72.3 million while AFFO was up 15.1 per cent over H2 FY20 to $62.4 million
- Leasing activities continued with 96 renewals and 63 new leases completed during the half
- Over the next six months, SCP is aiming to ensure its centres emerge from COVID-19 in a strong position and operations resume as normal
- The company has stated it will continue to partner with supermarkets, ensure long-term sustainability, and ensure sustainable and affordable rent for tenants
- SCP is down a slight 0.43 per cent and shares are trading at $2.33
Shopping Centres Australasia Property Group (SCP) has seen a 14.1 per cent increase in net profit over tax for H1 FY21.
The real estate investment company recorded net profit after tax of $102.9 million, driven by an increase in the value of investment properties.
Pleasingly, funds from operations (FFO) and adjusted funds from operations (AFFO) have improved as the negative impact of COVID-19 lessens.
FFO was up 16.1 per cent over H2 FY20 to $72.3 million while AFFO was up 15.1 per cent over H2 FY20 to $62.4 million.
Property valuations and acquisitions
SCP saw an increase in the value of its investment properties from $3138.2 million in June 2020 to $3403.3 million.
This was due to the acquisitions of Bakewell for $39.4 million, Auburn Central for $129.5 million, and vacant land neighbouring its Greenbank Shopping Centre for $10 million.
In December, SCP agreed to acquire Katoomba Marketplace from SURF 2 in the Blue Mountains for $55.1 million and in January it agreed to acquire Cooloola Cove Queensland for $18.6 million.
Both of these acquisitions are expected to settle by the end of the month.
Operations
As of December 31, SCP had a portfolio vacancy rate of 4.8 per cent gross leasable area (GLA), compared to 5.1 per cent as at June 30.
Pleasingly, this is in the company’s target range of 3 to 5 per cent.
Its portfolio occupancy rate was 98.2 per cent, a figure which has remained relatively stable since December 2014.
Leasing activities continued with 96 renewals and 63 new leases completed during the half.
Outlook
Over the next six months, SCP is aiming to ensure its centres emerge from COVID-19 in a strong position and operations resume as normal.
The company has stated it will continue to partner with supermarkets, ensure long-term sustainability, and ensure sustainable and affordable rent for tenants.
Assuming there are no further COVID-19 outbreaks, SCP’s guidance for FY21 FFO is at least 14.4 per cent cents per unit (CPU) and 12.2 cpu for AFFO.
These represent respective decreases of 1.7 per cent and 5.7 per cent over FY20.
“Throughout the COVID-19 pandemic, our convenience-based centres have benefited from the shift to shopping locally. Our anchor tenants have experienced strong sales growth and our specialty tenant sales have recovered following the easing of restrictions,” CEO Anthony Mellowes commented.
“Nevertheless, the COVID-19 pandemic has impacted some of our speciality tenants who have experienced sales declines. We have provided rental assistance to over 800 tenants, including both SME tenants and non-SME tenants,” he added.
SCP is down a slight 0.43 per cent and shares are trading at $2.33 at 1:17 pm AEDT.
