Highlights

• Funds from operations rose 4.4% to $612.4 million for the first half of 2026, with distributions of 9.215 cents.

• Australian Retirement Trust agreed to buy half of Westfield Mt Gravatt for $882.5 million, subject to ACCC clearance.

• Scentre refinanced $4.1 billion of debt, cutting its weighted average credit margin from 2.6% to 1.6% during the half.

• Management now expects full-year 2026 funds from operations of at least 23.79 cents per security, up from earlier guidance.

Scentre Group (ASX:SCG) spent the first half of 2026 reshaping both ends of its balance sheet: it swapped expensive debt for cheaper funding and brought in a new partner to share ownership of a Brisbane flagship. Shares were trading at A$3.53 on 23 October 2026, up 1.44%. The owner of 42 Westfield destinations also raised its full-year guidance.

Cheaper Debt Drives the Earnings Lift

Funds from operations for the six months to 30 June 2026 rose 4.4% to $612.4 million, or 11.73 cents per security. Operating profit increased 4.5% to $611.7 million. Net interest expense fell to $356.8 million from $415.1 million, while net operating income slipped 2.7% to $1,014.2 million.

Statutory profit was $975 million, including a $478 million unrealised property revaluation gain. Portfolio valuations rose 1.6% over the half, with the weighted average capitalisation rate at 5.45%. Net tangible assets were $3.71 per security, up from $3.62 at December 2025.

The funding story was substantial. Scentre refinanced $4.1 billion of higher-cost debt, including $2.3 billion of senior notes and $1.8 billion of subordinated notes, and issued a $750 million six-year senior note at a 1.2% margin. It also extended $1.7 billion of bank facilities. Liquidity stood at $3.5 billion, gearing at 35.5%, and hedging at 95%.

A New Partner at Mt Gravatt

On 24 August 2026, Scentre said Australian Retirement Trust will acquire a 50% interest in Westfield Mt Gravatt for $882.5 million. The price includes $870.0 million for the direct property interest at a 5.50% capitalisation rate and $12.5 million for adjacent land, a 3.5% premium to December 2025 book values. The deal depends on ACCC clearance.

Scentre keeps its 50% stake and stays on as property, leasing and development manager. The company said it has announced about $3.1 billion of third-party joint venture capital over 13 months, and proceeds from this sale will first repay bank debt.

Centres Running Close to Full

Occupancy reached 99.8%, the highest since 2013. Twelve-month business partner sales hit a record $30.3 billion, with specialty sales up 5.4%. Customer visits totalled a record 552 million over the past year. The company signed 1,401 leasing deals at average positive spreads of 3.7%, with specialty rent escalations averaging 5.5%.

Retail development is continuing. Westfield Bondi's $240 million Level 6 project opens in stages from late Q4 2026, and Westfield Tuggerah's former department store space is being repurposed from Q3 2026. Scentre also reported more than $4 billion of future retail development opportunities, targeting yields of 6% to 7%. Its pipeline of potential dwellings on 670 hectares of land grew from 20,200 to 25,600.

Guidance and Dates Management Has Set

Subject to no material change in conditions, Scentre expects second-half funds from operations of at least 12.06 cents per security and full-year 2026 funds from operations of at least 23.79 cents, growth of at least 4.25%. The second-half distribution is set at 9.258 cents per security, taking the full-year distribution to 18.473 cents.

Westfield Bondi's Level 6 precinct is due to begin opening in late Q4 2026, and the Mt Gravatt transaction remains subject to regulatory clearance.