Vicinity Centres sticks to guidance after steady Q3

The news: Shopping centre group Vicinity Centres has reaffirmed its full-year earnings guidance after reporting higher portfolio sales and growth in net property income for the March quarter.

The numbers: The company said portfolio retail sales remained positive in the third quarter, up 1.6% from a year ago. Comparable net property income also rose 4%, in line with the growth trend during the first half, while occupancy at its shopping centres also remained robust, at 99.1%. Vicinity shares were down 2.2% to $1.88% in a weak Australian market.

The context: The landlord, which counts Melbourne’s Chadstone and Sydney’s Queen Victoria Building among its properties, said year-to-date leasing spreads remain positive at 2.6%, driven by retailer demand for stores at premium centres and strong sales growth post-pandemic.

“We retain our view that the medium to long term fundamentals of the Australian retail sector remain favourable, supported by record levels of migration, a robust employment market, and stage three tax cuts becoming effective from 1 July 2024,” CEO Peter Huddle said.