Retail sales within Vicinity Centres’ portfolio have rebounded in the third quarter, boosted by a strong performance from the recently redeveloped Chadstone shopping centre.
Specialty sales increased by 1.9 per cent in the quarter within the listed landlord’s portfolio, while specialty store moving annual turnover (MAT) growth was .4 per cent for the twelve months to 31 March, up from a 0.7 per cent decline in the second quarter.
Chadstone has brought $1.99 billion in annual MAT to the table to the end of March, up 24 per cent, with specialty store MAT up 10.6 per cent.
Chief executive and managing director Grant Kelly said the landlord had delivered on strengthening its portfolio in the first three months of 2018.
“We’ve seen a broad improvement in retail sales growth, particularly in the last quarter,” he said.
“Chadstone continued its outstanding performance in the period, ranking as Australia’s number one shopping centre for a 17th consecutive year.”
Vicinity said it expects funds from operations for FY18 to be 18.2 cents per security, the top end of its previously announced guidance range.
Across Vicinity’s portfolio discount department stores booked the strongest MAT growth to the end of the third quarter, up 2.9 per cent, while department stores MAT declined 3.8 per cent.
Supermarkets were up 2 per cent and the other retail category, which includes cinemas, travel agents, auto accessories, lotteries and other entertainment, was up 1.4 per cent.
By specialty category Vicinity experienced similar conditions to other Australian landlords over the third quarter, with apparel MAT growth down 2.6 per cent, offset by a 7.6 per cent spike in retail services.
Despite falling apparel sales, Vicinity said that the negative impact on apparel sales associated with tenant administrations had reduced during the quarter and that efforts to remix its portfolio to stronger brands wee beginning to pay off.
Food catering, which includes cafes and restaurants as well as take-away food, booked MAT growth of 2.8 per cent, offsetting a 2.1 per cent decline in food retail, which was impacted by tenancy remixing.
Homewares MAT growth was 1.5 per cent to 31 March, helped along by a 2.4 per cent increase in electrical/computers.
Vicinity’s direct factory outlet (DFO) portfolio also performed well, with MAT growth of 4.6 per cent on $9,957 specialty MAT per sqm.
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