Westfield shopping centres owner Scentre Group (ASX: SCG), has struck a bullish tone on Australian retail conditions and is forecasting at least 4% earnings growth in 2026.
The group is planning a $240 million redevelopment of the top level at Westfield Bondi, reshaping the space around lifestyle, entertainment and dining as higher-income shoppers return to major malls.
Despite the news, shares were down 2.24% in late afternoon trade.
For 2025, Scentre delivered a 4.9% increase in funds from operations (FFO) — a key measure of property earnings — to $1.19 billion. Statutory profit came in at $1.78 billion, supported by property revaluations as investor demand lifted for high-quality retail assets.
Chief executive Elliott Rusanow said the group is focused on growing economic activity across its 42 Westfield centres, including by supporting major music tours and sporting events such as the Australian Open.
“This strategy continues to deliver strong operating performance and continued growth in earnings,” Rusanow said. “Our focus is to attract more people to our destinations and give them reasons to stay longer when they are with us.”
Scentre also flagged a greater emphasis on unlocking value from its land bank, including housing opportunities at sites in NSW and the ACT. Rusanow said proposals have now been lodged for another 6 centres that may suit mixed-use development, supporting a longer-term pipeline of about 16,000 residences.
The company said its centres have continued to rebound from pandemic-era disruptions, with 2025 marking its fifth consecutive year of earnings and distributions growth.
Customer visits across the portfolio reached 540 million in 2025, up 2.7% on 2024. In the first 53 days of 2026, visitation was 79 million, up 3.1% on the same period in 2025.
Retail sales across the portfolio totalled $30 billion for 2025, up 3.6% year-on-year, with second-half growth of 4.5%. January sales growth was 5.4% versus the prior corresponding period. Strong demand for space kept occupancy at 99.8%, the highest level since 2013.
Looking ahead, Scentre said its focus on lifting visitation, broadening its business partnerships and better utilising land holdings is expected to support sustainable long-term growth in earnings and distributions.
Subject to no material change in conditions, the group is targeting FFO of at least 23.73 cents per security in 2026, representing at least 4% growth. Distributions are expected to rise 4% to 18.43 cents per security.