Shoppers back in Westfield malls as Scentre chairman to depart

The shopping centre giant has unveiled changes at the top of the company as seven of its Westfield destinations generate more than $1bn in annual sales.

Westfield chairman Brian Schwartz will step down in September. Picture: NCA NewsWire / Christian Gilles

Local Westfield owner Scentre Group has given an upbeat assessment on the return of customers to big malls at its annual general meeting in Sydney, also announcing that long-time chairman Brian Schwartz will step down at the end of September.

Despite the Reserve Bank calling out the rising pressures on consumers from higher rates, Scentre says that its customers have come back into malls strongly and are spending in shops.

Investors are still nervous about the prospects of large malls and global investors remain wary about their sliding values in the face of the switch to e-commerce.

Speaking at a National Press Club lunch in Sydney, Reserve Bank governor Philip Lowe noted that household consumption was being impacted after multiple rate hikes. “It is increasingly clear that the higher interest rates are having an impact on aggregate household spending,” he said.

“Consumption growth has slowed considerably from the very fast rates during the Covid bounce-back and it is now below average,” Dr Lowe said.

Scentre chief executive Elliott Rusanow said the company’s strategy of driving customer visits to its Westfield sites had seen strong operating performance in the early part of 2023 and played down the impact of interest rates on retail activity.

“I am pleased to report in the first 13 weeks to 2 April 2023 we welcomed 125 million customer visits, which is an increase of 16 per cent or 17 million more visits compared to the same period in 2022,” he said.

At an upbeat annual meeting, the Scentre board endorsed Ilana Atlas as chair-elect after she was appointed as a director in 2021.

The company’s remuneration report was carried with a minimal protest vote of 4.22 per cent and despite opposition from vocal investors over plans to elect former Crown Resorts chief executive Steve McCann to its board he was opposed by just 5.57 per cent of shareholders.

Major property funds manager Resolution Capital was against his election and his nomination also drew fire from the Australian Shareholders’ Association, which has argued his experience – including 12 years running Lendlease – was not strong enough for him to join Scentre’s board.

Mr Schwartz has been the group’s chair since 2016. In that time the Lowy family has exited its holdings in the company and its separate offshore cousin, Unibail-Rodamco-Westfield.

The Lowy family completed its sell down of its Scentre stake in 2019 ahead of the pandemic slamming into the shopping centre industry and has since diversified around the world. Mr Schwartz also oversaw the elevation of Mr Rusanow to chief executive as founding chief Peter Allen departed.

“Having completed the group’s CEO succession, and with the company moving forward strongly as demonstrated by our most recent full year results with Funds from operation and distribution both exceeding guidance, it is the right time for me to step down,” Mr Schwartz said.

The company is overhauling centres to get more customers to shop and spend leisure time. Picture: Britta Campion

Mr Rusanow said the company’s strategy of driving customer visits to its Westfield sites had seen strong operating performance in the early part of 2023.

“Total business partner sales for January and February 2023 are 17 per cent higher compared to the same period in 2022 and 10 per cent higher than 2019,” he added.

Cash collections for the first three months of the year were $663m, or $78m higher than the comparable period in 2022.

“Progress continues to be made on the group’s strategic customer initiatives including our membership program which now has 3.4 million members, an increase of 1.2 million since the start of 2022,” he said.

The group has bounced back from the pandemic and seven of its Westfield destinations generate more than $1bn in annual sales including Chermside, Bondi Junction, Fountain Gate, Sydney, Miranda, Carindale and most recently Doncaster.

The company is not as focused on mixed use plays as rival Vicinity Centres but is overhauling centres to get more customers to shop and spend leisure time.

“We remain focused on activating our destinations and creating reasons for customers to visit us. So far this year, we have hosted more than 2,500 events and improved the experience for our customers,” Mr Rusanow said.

Scentre shares bumped by 1c to $2.82.