Vicinity Centres (VCX) H2 2024 earnings summary

Executive summary

• Statutory net profit after tax for FY24 was $547.1m, more than doubling from FY23, driven by strong leasing, portfolio repositioning, and valuation gains.

• Achieved operating and financial objectives for FY24, with significant progress in strategic execution, premium asset acquisitions (Lakeside Joondalup, Chatswood Chase), and divestment of seven non-strategic assets at a premium.

• Portfolio occupancy reached 99.3%, with over 2,000 leasing deals completed, positive leasing spreads, and a 4.8% average annual escalator on new leases.

• Major developments at Chadstone and Chatswood Chase progressed, with high pre-leasing commitments, new office and retail precincts, and strong retailer demand.

• Sustainability initiatives advanced, achieving up to 40% emissions intensity reduction since FY16 and strong sustainability rankings.

Financial highlights

• Statutory net profit after tax: $547.1m; FFO per security: 14.6c, AFFO per security: 12.3c, both above guidance.

• Distribution per security: 11.75c, representing a 95.2% payout of AFFO.

• Comparable NPI up 4.1% year-over-year; adjusted FFO up 3.2% after one-offs and higher rent loss from developments.

• Asset sales exceeded $550m at a 9% premium to book value.

• Net tangible assets per security increased to $2.30, up 0.4% over 2H FY24.

Outlook and guidance

• FY25 FFO per security guidance: 14.5–14.8c; AFFO per security: 12.3–12.6c; payout ratio targeted at 95–100% of AFFO.

• Normalised FFO per security growth expected between 2% and 4%.

• Targeting $250m in additional asset sales in FY25; comparable NPI growth of 3.0–3.5% expected.

• FY25 expected to be peak period for loss of rent from developments (~$35m), mainly from Chatswood Chase.

• Maintenance capex and leasing incentives of ~$100m, and investment capex of ~$470m planned for FY25.