19/08/2020 - 15:50

Vicinity Centres suffers $1.8bn loss

19/08/2020 - 15:50

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Property group Vicinity Centres has reported a net loss of $1.8 billion amid retail closures and declining visitor numbers at its shopping centres.

Vicinity Centres suffers $1.8bn loss
Vicinity owns interests in 12 Western Australian centres including the Galleria and Mandurah Forum. Photo: Vicinity Centres

Property group Vicinity Centres has reported a net loss of $1.8 billion amid retail closures and declining visitor numbers at its shopping centres.

The Melbourne-based group, which owns interests in 12 Western Australian centres including the Galleria and Mandurah Forum, said centre visitation across its portfolio had fallen to a low of 42 per cent of shoppers recorded in the prior year after coronavirus restrictions were introduced.

Managing director Grant Kelley said the restrictions, which prompted some retailers to voluntary close their stores, had a material impact on the business and broader retail industry.

Vicinity, which generally sees 400 million visitors annually, reported funds from operations of $520.3 million in the 12 months to June 30, down 25 per cent on the prior year.

Mr Kelley said centre visition had improved quicker in states outside of Victoria and NSW, when COVID-19 infections gradually became lower.

He said the virus would continue to cause uncertain conditions and, as a result, Vicinity would not provide an earnings and distribution guidance for FY21.

Mr Kelley said, however, the group had a strong balance sheet after raising $1.2 billion in June to address the impacts of COVID-19, along with extending bank facilities amounting to $2.1 billion in liquidity.

"Our near-term focus for FY21 is to stabilise centre occupancy and rental income while carefully managing costs," he said.

The business had taken a number of cost management measures during FY20 including selling some of its projects, such as the major redevelopment of Chatswood Chase Sydney shopping centre.

Vicinity will progress other opportunities without large, near-term commitment, Mr Kelley said.

Shares in Vicinity closed down 5.2 per cent to trade at $1.28.

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