Federation Centres delivers positive result

Federation centres, novion, shopping centreThe Federation Centres (FDC) owned and co-owned portfolio delivered a sound operating performance with Net Operating Income up 3.6 per cent for the nine months to March 2015 compared to the prior corresponding period.

The leasing spread was maintained at 3.2 per cent, in line with the half year result, with 585 transactions completed for the nine month period.

Annual sales growth for the year to March 31 was 1.0 per cent, with specialty retailers recording annual sales growth of 2.3 per cent. The occupancy rate was 99.4 per cent.

Steven Sewell, MD and CEO at Federation Centres, said he is pleased with how the Centres portfolio has continued to perform well during the quarter while the work to prepare for the merger with Novion Property Group has also proceeded smoothly.

“The delivery of Net Operating Income growth combined with a stable leasing spread shows there is an excellent basis for the merger which will provide Federation Centres investors with increased returns and enhanced growth opportunities from a larger and more diverse portfolio,” he said.

Portfolio Snapshot

The portfolio continued its positive growth trend, supported by the ongoing strength in the Specialties category.

The improvement in Net Operating Income resulted from both growth in income as well as savings in centre operating expenses from an ongoing focus on procurement savings and cost reductions.

There was also an improvement in the Discount Department Stores and Department Stores categories, compared with their December 2014 annual sales performance. Mini Majors performed well, although sales moderated as new entrants in this category saw sales stabilise after buoyant initial trading.

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Redevelopments at Warriewood Square in NSW and Halls Head in Western Australia are progressing well and initial works have commenced for the second stage of the redevelopment at Colonnades in South Australia.

Approval for redevelopment plans for Mandurah Forum was also recently received. The first stage of the Cranbourne Park redevelopment opened on time and fully leased during the quarter.

Capital Transactions

The previously announced sales of Woodlands in Queensland and Mildura and Warrnambool in Victoria all settled during the quarter.

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Appendix – Annual Sales Growth Analysis as at 31 March 2015:

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