Scentre Group recovery outpaces Vicinity Centres as shoppers flock to Westfield

Scentre Group recovery outpaces Vicinity Centres as shoppers flock to Westfield

After recording a $3.73 billion loss due to COVID-related restrictions in 2020, recent cash collections from Australia and New Zealand's operator of Westfield shopping centres make it look like the pandemic is all but over.

Recent outbreaks in Perth and Sydney show that is definitely not the case, not to mention the drastically different situation globally, but numbers produced by Scentre Group (ASX: SCG) are brimming with optimism for Australian retail.

Scentre Group has consistently raked in gross rent cash collections around the $200 million mark every month this year so far, which is the same as in January and February 2020, and of course markedly higher than the lockdown-riddled months of March and April last year.

Customer visitation has also continued to improve with rates in April at 93 per cent of 2019 levels.

This compares to 77 per cent visitation rates for the group's nearest listed competitor Vicinity Centres (ASX: VCX), which has been hit harder due to its high exposure to premium CBD sites including DFO South Wharf Melbourne, Emporium Melbourne and QueensPlaza in Brisbane.

However, even excluding Vicinity's CBD locations and bolstered by the likes of DFO Homebush, Chatwood Chase Sydney and numerous suburban and regional shopping centres around the country, it still falls well short of Scentre Group with 83 per cent of pre-COVID visitation levels.

Also in contrast to Vicinity whose portfolio sales have been weighed down by a 5.5 per cent decline versus 2019 levels at specialty stores in March, Scentre Group's sales for the same category were marginally up by 1.4 per cent for the quarter.

Growth was not on the cards nationwide though, with Scentre Group's specialty store sales down in NSW and VIC on 2019 rates by 4.6 per cent and 4 per cent respectively, compared to growth in NZ (25.8 per cent), WA (11.6 per cent), the ACT (9.9 per cent), SA (8 per cent) and QLD (4.9 per cent).

Scentre Group also notes its $55 million entertainment, leisure and dining precinct development at Westfield Mt Druitt, Sydney is progressing well and is expected to open at the end of 2021

Works on behalf of Cbus Property to design and construct a residential and commercial tower in Sydney's CBD are also reportedly progressing well, with completion expected in 2023.

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