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Shopping centre owners scrap FY20 guidance

Major shopping centre owners have suspended their FY20 outlook in light of the coronavirus outbreak, as customers are being increasingly asked to stay indoors and avoid public places.

Vicinity Centres and Scentre Group pulled their FY20 guidance on Friday, while Stocklands and Home Consortium did so on Monday morning.

Stockland managing director and chief executive Mark Steinert said it was closely monitoring the outbreak, and acknowledged it will likely last for some time.

“As a company we have navigated many challenges and difficulties over our proud 68 year history,” Steinert said.

“I am confident that our board and executive committee have the depth and breadth of experience to respond to this unprecedented event.”

Home Consortium said that while foot traffic had been resilient during the start of the year, it was withdrawing earnings, distribution and occupancy guidance for the months ahead.

“While fully understanding our corporate responsibility to our stakeholders, we continue to believe in our hyper-convenience centre model and will endeavor to deliver long-term value to our shareholders,” Di Pilla said.

“We support, and will continue to support, all the measures being taken by the Federal and State governments across Australia at this time.”

Vicinity said its balance sheet remains solid, with $1.3 billion of undrawn facilities, but said it is withdrawing its FY20 earnings and distribution guidance due to the increased uncertainty surrounding the COVID-19 outbreak and its impact to retail trading and operating environment.

Grant Kelley, Vicinity CEO and managing director, said the shopping centre owner has seen further deterioration in the retail trading and operating environment since it announced interim results in mid-February, with increasing uncertainty around the impacts of COVID-19.

“Given this, we have made the decision to withdraw our FY20 earnings and distribution guidance provided at that time,” Kelley said.

Kelley said Vicinity recognises the impact COVID-19 is having in Australia and will continue to work with retailers during this period of adjustment.

A spokesperson told Inside Retail, “We don’t generally comment on our negotiations with individual retailers, but as the spread and impacts of COVID-19 (Coronavirus) continues to evolve, we are continuing to maintain an open dialogue and support our retailers on a case-by-case basis.”

Scentre Group said its operations have performed in line with its expectations during the early part of 2020, as shown in its 2019 full year results released on February 18, 2020.

Contained in that announcement was an outlook statement including guidance for Funds from Operations (FFO) and Distribution for the 12 months ending December 31, 2020.

The company said in light of the COVID-19 pandemic and volatility in markets globally it’s suspending the outlook for 2020 that was previously announced.

The company will give further updates on its annual general meeting on April 8.

Updated 23/3: Additional reporting by Dean Blake.

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