Westfield owner Scentre eyes 20,000-apartment pipeline
The country’s biggest shopping centre owner, Scentre, which operates Westfield malls, is set to become a major player in the housing sector as well after lodging proposals to develop more than 16,000 apartments at six of its malls.
Scentre already has approval for 4100 dwellings at Westfield Hornsby in Sydney and Westfield Belconnen in Canberra.
Handing down the company’s 2025 annual result on Tuesday, chief executive Elliott Rusanow said Scentre was pursuing approvals at six more malls, including Westfield locations in Brisbane (Carindale and Mount Gravatt), at its Warringah mall in Sydney, at Woden in Canberra and at Knox and Southland in Melbourne.
Scentre’s ambitions to develop its 670 hectares of prized real estate in prime locations extend beyond retail and residential redevelopment, said Rusanow.
“Our destinations have the opportunity to play a far bigger role than retail,” he said.
“We are focused on generating greater economic activity in and around our destinations through the better use of our strategically located land for a multitude of potential usages: residential, student accommodation, health and education, just to highlight some of these potential usages.”
Scentre’s portfolio includes the malls themselves, some vacant land and the carparks that surround shopping centres. About 40 per cent to 50 per cent of that land bank is built form, with car parks allowing particular scope for redevelopment.
“Today its use is to house a car. In the future, we see it as housing a car and a lot more above it,” said Rusanow.
The scope for redevelopment of its real estate into other uses extends across almost the entire 42-asset Scentre portfolio, with the exception of Westfield Sydney.
Scentre will look to win joint venture partners to proceed with any redevelopment where it can, with potential candidates ranging from domestic and offshore pension funds to established residential developers, said Rusanow.
“You can imagine that a lot of them are already calling us. There’s a wall of capital looking to invest generally. Capital is looking to invest in thematics, and the living sector is a major thematic,” he told The Australian Financial Review.
“They know that we own a lot of land in places that can’t easily be bought.”
Scentre recorded a 4.9 per cent lift in funds from operations – an industry earnings standard – to almost $1.2 billion, equivalent to 22.82¢, a result that was ahead of guidance.
Net statutory profit for the period was almost $1.8 billion, up 69.4 per cent, after booking in portfolio gains.
Rusanow also announced plans for a $240 million redevelopment at Westfield Bondi in Sydney to transform the centre’s sixth level into a lifestyle, entertainment and dining destination.
Underlying the profits at Scentre are its retailers’ sales, which hit a record $30 billion during 2025, up $1 billion or 3.6 per cent more than in 2024, with the second half growing by 4.5 per cent.
Over January, sales grew by 5.4 per cent on the comparable previous period.
Scentre struck 3090 leasing deals in 2025, with new specialty lease spreads of 3.2 per cent, a key metric for the industry which shows the difference in value between old and new rents, indicating growth in revenue ahead.
Scentre also brought in more capital partners to invest in its wholly owned malls. That frees up capital that the company can use to drive redevelopment. There is scope for further investment in 11 malls.
”During 2025, we introduced approximately $2.2 billion of new capital into the group through the joint venturing of our assets, delivering on a key part of our long-term strategic plan,” said Rusanow.
Those deals include a 50 per cent joint venture of Westfield Chermside in Brisbane with Dexus for $1.3 billion and, just before Christmas, a partnership with super fund giant Australian Retirement Trust purchasing a 19.9 per cent interest in Westfield Sydney for $864 million.
Scentre delivered a 3.4 per cent lift in distributions over 2025 of 17.72¢. For 2026, its earnings target for funds from operations is at least 23.73¢. That would represent at least 4 per cent growth for the year.
Distributions are expected to grow by 4 per cent as well for 2026 to 18.43¢.
Its 2026 guidance was slightly below market consensus, and its stock closed 4¢ lower, or 1 per cent, to $3.75. Citi analyst Howard Penny noted that the “deployment opportunities” of the capital Scentre had raised was yet to be captured in its guidance.
“Although the dilution from sell-downs of asset stakes reduces earnings in the short term, we expect the redeployment of this capital at higher double-digit IRRs [internal rates of return] should lift the growth outlook for Scentre in the short to medium term,” Penny wrote in a client note.
