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 high occupancy at 99.3%, with over 2,000 leasing deals, positive leasing spreads, and a 4.8% average annual escalator on new leases.

• Advanced portfolio repositioning with major acquisitions (Lakeside Joondalup, Chatswood Chase) and divestment of seven non-strategic assets at a premium to book value.

• Major developments at Chadstone and Chatswood Chase progressed, with strong pre-leasing, high-profile tenants, and new office and retail precincts nearing completion.

• Sustainability initiatives advanced, with emissions intensity down 38–40% since FY16 and strong renewable energy generation.

Financial highlights

• Statutory net profit after tax was $547.1m; FFO was $664.6m, down 2.9% year-over-year, but adjusted FFO rose 3.2% after one-offs.

• FFO per security was 14.6c, above guidance, with a final distribution of 5.9c per security and a full-year payout ratio of 95.2% of AFFO.

• Comparable NPI increased 4.1% year-over-year, driven by positive leasing spreads and higher occupancy.

• 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 is 14.5–14.8c, with normalized growth of 2–4%; AFFO per security expected at 12.3–12.6c.

• Comparable NPI growth forecast at 3.0–3.5% for FY25.

• Targeting $250m in additional asset sales in FY25.

• FY25 will see peak lost rent from developments (~$35m), with cost of debt rising to 5.1%.

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