Australia's biggest retail landlord is keeping a close eye on the performance of its tenants following the recent demise of retailers Allphones, Marcs, David Lawrence, Pumpkin Patch and Payless Shoes.
Scentre Group, the owner of Westfield shopping centres in Australia and New Zealand, says it will replace a tenant with a more popular retailer if it shows signs of poor sales or falls behind in rent payments.
"When we do see poor performance or poor payment, we would work in terms of looking at replacing those retailers," chief executive Peter Allen said as he reported a 10 per cent rise in Scentre's annual net profit.
Scentre had seven or eight Allphones stores in its shopping centres when the mobile phone group was placed in administration in early February, he said, down from 25 stores some three or four years ago.
Scentre had also removed Rhodes & Beckett clothing stores from its centres before that chain went into administration.
"We are very proactive in terms of making sure that we replace those retailers who are poorly performing with better performing retailers, which allows us to provide the right retail mix with those retailers which are in demand by the consumers," Mr Allen said.
Scentre's full year net profit rose to $2.99 billion, thanks to higher sales in its shopping centres and property revaluations of $1.6 billion.
Annual comparable speciality sales rose 2.6 per cent, with good increases in jewellery, health & beauty, food retail and technology, Scentre said.
The company's revenue fell 12 per cent to $2.5 billion due to lower property development and project management revenue.
Funds from operations - Scentre's preferred measure of financial performance that excludes property revaluations and other one-off items, rose 3.2 per cent to $1.23 billion, exceeding the group's guidance.
The company has forecast FFO growth of 4.25 per cent for 2017, and a two per cent rise in its distributions to investors.
Scentre shares were down 2.5 cents at $4.475 at 1210 AEDT.
WESTFIELD SALES GROWTH BOOSTS SCENTRE'S PROFIT
* Full year net profit up 10.4pct to $2.99b
* Revenue down 12.1pct to $2.52b
* Final distribution up 0.2 cents to 10.65 cents
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