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Highlights

  • Vicinity Centres saw a 117.6% YoY increase in net income to AUD 549 million and a 4.2% increase in revenue to AUD 1,253.6 million in FY24.
  • Portfolio occupancy stood at 3% in FY24, although slightly lower at 99.2% due to a recent acquisition.
  • The company expects funds from operations (FFO) to range between 14.5 and 14.8 cents, with adjusted funds (AFFO) between 12.3 and 12.6 cents per share in FY25, supported by a positive retail sector outlook.

Vicinity Centres (ASX:VCX) is a retail REIT company in Australia with retail assets under management. The company offers variety of retail, residential, and office spaces. In the financial year 2024 (FY24), the company witnessed an 117.6% YoY increase in net income to AUD 549 million with a 4.2% YoY increase in revenue and income to AUD 1,253.6 million.

Leasing results have driven present and future income growth with portfolio occupancy touching 99.3%. The total portfolio recorded a 4.1% rise in comparable net property income (NPI).

 Vicinity has reaffirmed its FY25 forecast, expecting funds from operations to range between 14.5 and 14.8 cents, and adjusted funds from operations between 12.3 and 12.6 cents.

The company stated that occupancy levels remain at 99.2%, a slight drop of 10 basis points since June. This decrease is due to the acquisition of Perth's Lakeside Joondalup shopping centre, which currently has a lower occupancy rate compared to Vicinity's overall portfolio average.

In a recent ASX update, the company mentioned that its performance in 1QFY25 aligns with its expectations. During the quarter, retail sales across the portfolio were flat, continuing the trends witnessed in 4QFY24. Moving annual total (MAT) grew by 1.1%, CBDs increased by nearly 2.5% and outlet centres jumped over 2.1% in 1QFY25.

The quarter recorded a 2.0% increase in portfolio sales, excluding Chadstone.

Outlook

Vicinity has reaffirmed its FY25 forecast, expecting funds from operations to range between 14.5 and 14.8 cents, and adjusted funds from operations between 12.3 and 12.6 cents per share.

The company is optimistic about the retail property sector’s long-term prospects, underpinned by factors like positive employment market, constrained supply of new retail and population growth. Additionally, leasing spreads in FY25 are anticipated to remain in line with previous financial year.

Share performance of VCX

VCX shares closed 0.46% lower at AUD 2.15 apiece on 5 November 2024. VCX’s share price has increased by 19.11% in the past one year and by 5.39% in the last three months.

52-week high of VCX is AUD 2.43, recorded on 20 September 2024 and 52-week low is AUD 1.745, recorded on 13 November 2023.

VCX Daily Technical Chart, Source: REFINITIV

Note 1: Past performance is neither an Indicator nor a guarantee of future performance.

Note 2: The reference date for all price data, and currency, is 05 November 2024. The reference data in this report has been partly sourced from REFINITIV.