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Westfield’s malls have come to life in the post-COVID-19 world, as consumers seemingly return in droves to spend their saved money on fashion, jewelry, technology and home appliances and the ubiquitous entertainment equipment.

Scentre, which owns Westfield shopping centers in Australia and New Zealand, said in the March quarter update that visitation is 12% higher than in 2021 or 16% higher if CBD centers are excluded.

Aussies are going back to the shops.Credit:Jenny Evans/Getty Images

The surge in sales growth defies the overall state of the economy, where the latest ANZ-Roy Morgan consumer confidence index fell 0.2 percent to a 20-month low of 90.5, based on fears. rising cost of living pressures.

Retiring CEO Peter Allen said there is concrete evidence of weekly improvement in urban and suburban centers. As a result of the improvements and subject to no material change in terms, Allen expects the group to distribute at least 15¢ worth by 2022, growing at least 5.3 percent.

“Demand continues from existing and new businesses that want to expand their physical store network,” Allen said.

Breaking down figures provided by the owner of a largest mall in the country, the overall growth in sales from January to March increased by 7.1 percent, while in the month of March alone, sales increased by 11.2 percent. The retail services category that encompasses everything from coffee shops to banks, pharmacies and health centers, posted 18.4% sales growth.

Shoppers continued to fall out of love with department stores as sales growth fell 4.6% during the quarter and, with bad weather in January alone, sales growth slumped 20.3%.

The savvy consumer, however, preferred the discount department stores, where sales growth rose 16.6 percent in the quarter.

Allen said portfolio occupancy remains strong at 98.7 percent at the end of March and about 80 percent of special leases are inflation-linked with average annual rent increases of CPI + 2 percent.

The remaining 20 percent of special leases have fixed annual rent increases with an average increase of 4 percent, and special rent accounts for more than 90 percent of net operating income.

“Gross rental collections for the four-month period ending April 30, 2022 was $800 million,” Allen said. During the three months to March 31, 2022, the Group completed 536 lease agreements, including 237 new dealers, welcoming 50 new brands to the portfolio.

Scentre Group CFO and CEO-elect Elliott Rusanow said financially the group was sound having restructured its interest rate hedging profile to increase coverage in 2023 and 2024. Real estate analysts had raised concerns by the group’s level of debt as interest rates begin to rise.

“Interest rate coverage in January 2023 increased from 50 percent to around 65 percent, with a weighted average rate of 1.87 percent,” Rusanow said.

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