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Vicinity Centres Profitable Again As Shoppers Return

Vicinity Centres has banked a net profit of $1.2 billion, as shoppers started to return to mall during the second half of the financial year.

Vicinity Centres posted statutory net profit after tax of $1.215 billion, after posting a loss of $258 million in FY21.

Close to half of this profit comes from non-cash property valuation gains of $554 million, with funds from operations making up $598 million.

The FFO growth was driven by an 8 per cent uplift to $803 million in net property income, which Vicinity says reflects sustained strength of retail sales, and improved negotiation outcomes with retailers, and “therefore stronger than expected cash collections, rental growth, and improved ancillary income.”

“FY22 has been a positive year for Vicinity,” Grant Kelley, CEO and Managing Director, said.

“Favourable retail trading conditions combined with strong operational execution and prudent financial stewardship, have underpinned an acceleration in our recovery as demonstrated by today’s results.

“After prolonged lockdowns in our two largest states of NSW and Victoria in 1H FY22, the retail sector has enjoyed a sustained rebound in retail sales and importantly, retailer confidence.”

Vicinity completed 1,378 leasing deals during the financial year, 121 more deals than in FY21.

Vicinity leased 374 vacant stores, with occupancy sitting at 98.3 per cent at the end of June 2022. Collection of gross rental billings averaged 91 per cent for FY22, and 93 per cent for the second half of 2022 – suggesting that the days of landlords allowing rent freezes are over.

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