Scentre Group · ASX:SCG
Scentre — Investor Day (September 2016)
62 slides from Scentre's investor day presentation, Sep 22, 2016
Slide 1: Investor Day – 22 September 2016
INVESTOR DAY – 22 SEPTEMBER 2016 Owner and Operator of in Australia and New Zealand
Slide 2: Disclaimer
Disclaimer Scentre Group Limited ABN 66 001 671 496 All amounts in Australian dollars unless otherwise specified The financial information included in this release is based on the Scentre Group’s IFRS financial statements. Non IFRS financial information included in this release has not been audited
Slide 3: Scentre Group Overview – Peter Allen
SCENTRE GROUP OVERVIEW PETER ALLEN CHIEF EXECUTIVE OFFICER Uniquely positioned in the shopping centre retail segment
Slide 4: Agenda
AGENDA 1: SCENTRE GROUP 5: DATA & INSIGHTS OVERVIEW David Lamond Peter Allen 6: DEVELOPMENT & 2: SCENTRE GROUP ASSET MANAGEMENT PORTFOLIO Stewart White & Ian Irving Greg Miles 7: MIRANDA 3: LEASING & RETAIL REDEVELOPMENT John Papagiannis SOLUTIONS Peter Leslie 4: CUSTOMER EXPERIENCE Phil McAveety
Slide 5: Portfolio Summary as at June 2016
PORTFOLIO SUMMARY 1 30 AS AT 40 11,657 3.6m JUN CENTRES NUMBER OF GROSS LETTABLE 2016 RETAIL OUTLETS AREA (sqm) $30.8bn $12.5bn $43.3bn 5.54% SCG JV PARTNER ASSETS UNDER WEIGHTED AVERAGE INTEREST INTERESTS MANAGEMENT CAPITALISATION RATE 1. Includes construction in progress and assets held for develo
Slide 6: Our Portfolio
OUR PORTFOLIO AUSTRALIA 16 OF THE TOP 25 SHOPPING 34 centres CENTRES IN AUSTRALIA BY A$29.5 billion1 ANNUAL SALES NEW ZEALAND 6 centres NZ$1.4 billion1 Number of centres All dollar values refer to SGC share only. 1. Includes construction in progress and assets held for development 6 Scentre Group Ov
Slide 7: Our Purpose, Vision & Strategy
OUR PURPOSE, VISION & STRATEGY OUR OUR STRATEGIC PURPOSE VISION INTENTIONS Creating By 2018: • Focus on retail first in • We will be true business extraordinary Australia and New Zealand partners with our retailers • Achieve full potential of places • Our customers will feel we are essential to thei
Slide 8: Progress on Strategy
PROGRESS ON STRATEGY OPERATING PLATFORM QUALITY OF PORTFOLIO LEASING & CUSTOMER OUR STRATEGIC CURATION MAJOR RETAIL EXPERIENCE PEOPLE ASSET OF RETAIL DEVELOP- SOLUTIONS PLANS MENTS Enhancing the A newly integrated Building a culture Centre specific Integration of key Investment in value-add to our d
Slide 9: Scentre Group Portfolio – Greg Miles
SCENTRE GROUP PORTFOLIO GREG MILES CHIEF OPERATING OFFICER Concentrated on high quality assets in high growth trade areas
Slide 10: Improvement in Portfolio Quality
IMPROVEMENT IN PORTFOLIO Since the establishment of Scentre Group we have significantly improved the quality of the portfolio: • Invested $1.5 billion into the major development pipeline • Acquired $1.1 billion of high quality CBD and regional shopping centres • Divested $2.3 billion of assets that
Slide 11: Long Term Sustainable Growth
LONG TERM SUSTAINABLE GROWTH • Scentre Group’s pre-eminent portfolio creates significant customer and retailer demand enabling long term sustainable growth • Being the “first choice” partner for retailers allows for the curation of leading brands with high productivity, delivering strong rental grow
Slide 12: High Annual Sales
HIGH ANNUAL SALES Over 80% of our portfolio generates annual sales in excess of $500 million. ANNUAL SALES TURNOVER (AUD) > $500m (82%1) Sydney $1,120m Knox $701m Bondi Junction $1,044m Penrith $650m Fountain Gate $997m Hornsby $649m Doncaster $945m Warringah $614m < $500m (18%1) Carindale $909m Cha
Slide 13: High Specialty Sales Productivity
HIGH SPECIALTY SALES PRODUCTIVITY Over 70% of our portfolio generates average specialty sales productivity in excess $10,000 per square metre. The average specialty sales productivity for the portfolio is $11,000 per square metre. SPECIALTY SALES PSM (AUD) > $10,000 (74%1) Sydney $20,561 Miranda $11
Slide 14: Quality Assets Create Ongoing Development Potential
QUALITY ASSETS CREATE ONGOING DEVELOPMENT QUALITY ASSETS CREATE ONGOING POTENTIAL DEVELOPMENT POTENTIAL WESTFIELD NORTH LAKES WESTFIELD CHERMSIDE 2000 Acquired land 1957 Originally opened: Australia’s first shopping centre 2003 Developed as sub regional centre with Coles, Aldi, Target and 70 special
Slide 15: Major Developments
MAJOR DEVELOPMENTS Since its establishment, the Group’s project commencements per annum averaged in excess of $700m The Group achieves higher economic project yields and total returns through its vertically integrated operating platform 2017 PROJECT $1,000 $900 $800 COMMENCEMENTS $700 EXPECTED TO BE
Slide 16: Developments Since Establishment of Scentre Group
DEVELOPMENTS SINCE ESTABLISHMENT OF SCENTRE GROUP Miranda $500m $1.5 BILLION Garden City Chatswood $410m $120m OF DEVELOPMENTS Kotara $55m COMPLETED: Hurstville $105m $0.9 BILLION OF Casey Central $155m North Lakes - Stage 1 $80m DEVELOPMENTS Marion – Fresh Food Precinct $30m CURRENTLY UNDERWAY: War
Slide 17: Current Development Pipeline
CURRENT DEVELOPMENT PIPELINE In excess of $3 billion of future developments Newmarket • Coomera (QLD) • Marion (SA) • Warringah Mall • Albany (NZ) • Carousel (WA) • Plenty Valley (VIC) – Stage 2 (NSW) • Newmarket (NZ) • Innaloo (WA) • Sydney (NSW) • Whitford City • St Lukes (NZ) • Knox (VIC) • Tea T
Slide 18: Population Growth Across Portfolio
POPULATION GROWTH ACROSS PORTFOLIO PORTFOLIO BY ASSET +1 MILLION 1 VALUE (SCG SHARE) PEOPLE EVERY 6% 4% 4% THREE YEARS SHOPPING CENTRES 4% 52% 15% NSW VIC NSW VIC 32% 31% >50% 15% 15% NSW VIC QLD SA WA ACT NZ More than 50% of Scentre Group’s portfolio is based in NSW and 15% in Victoria: • Significa
Slide 19: Urbanised Population Growth
URBANISED POPULATION GROWTH SYDNEY 15% • From 2010 to 2016 the majority of residential property developments have been within Westfield centres trade areas >85% 26% 59% • More than 59% of residential property developments were within Westfield centres main trade areas • More than 85% of residential
Slide 20: Unique Benefits of Our Operating Platform
UNIQUE BENEFITS OF OUR OPERATING PLATFORM Dev & Asset Ownership Only vertically Management integrated retail operating platform in Australia and New Zealand encompassing Leasing & Retail all aspects of ownership, Design & Solutions customer experience, leasing Construc- tion and retail solutions, da
Slide 21: Leasing & Retail Solutions – Peter Leslie
LEASING & RETAIL SOLUTIONS PETER LESLIE DIRECTOR LEASING & RETAIL SOLUTIONS Transforming local and global retail with the highest productivity and customer experience
Slide 22: First Choice Partner for Retailers
FIRST CHOICE PARTNER FOR RETAILERS The most significant portfolio for retailers across Australia and New Zealand 11,657 4,000 >2,500 >1,000 >1,000 >250 1 1 1 1 RETAIL RETAILERS LEASING NEW STORE UPGRADE DEVELOPMENT OUTLETS TRANSACTIONS CONCEPTS, SHOPS (approx.) TO EXISTING KIOSKS AND DELIVERED STORE
Slide 23: Largest Partner with Long Standing Retailer Relationships
LARGEST PARTNER WITH LONG STANDING RETAILER RELATIONSHIPS 23 Quality Portfolio > First Choice Partner for Retailers
Slide 24: Largest Partner with Long Standing Retailer Relationships
LARGEST PARTNER WITH LONG STANDING RETAILER RELATIONSHIPS 24 Quality Portfolio > First Choice Partner for Retailers
Slide 25: First to Market Retailer Launch Opportunities
FIRST TO MARKET RETAILER LAUNCH OPPORTUNITIES 25 Quality Portfolio > First Choice Partner for Retailers
Slide 26: Fully Integrated Brands to Retail
FULLY INTEGRATED BRANDS TO RETAIL 26 Quality Portfolio > First Choice Partner for Retailers
Slide 27: Leasing and Retail Solutions
LEASING AND RETAIL SOLUTIONS FOCUS ON TRANSFORMING RETAILER UNDERSTAND AND PROVIDE RETAILER PARTNERSHIPS TO INCREASE THE VALUE- OPPORTUNITIES THROUGH DETAILED ADD TO REALISE FULL POTENTIAL KNOWLEDGE OF MARKET AND GLOBAL TRENDS BROADER RANGE OF RETAIL BRANDSPACE MARKETING DIGITAL & MEDIA SOLUTIONS: D
Slide 28: Focus on the Best Retail Product
FOCUS ON THE BEST RETAIL PRODUCT The Strategic Asset Plans detail the intensive focus on the precinct and product offering for each centre. Focus on the integration of key retail categories in each centre to curate an environment that connects customers with retail partners’ goods and services that
Slide 29: Health and Beauty
HEALTH AND BEAUTY 29 Quality Portfolio > Curation of Retail
Slide 30: Food and Beverage
FOOD AND BEVERAGE 30 Quality Portfolio > Curation of Retail
Slide 31: Leisure, Lifestyle and Entertainment
LEISURE, LIFESTYLE AND ENTERTAINMENT 31 Quality Portfolio > Curation of Retail
Slide 32: Global Luxe & Designer Fashion Brands
GLOBAL LUXE & DESIGNER FASHION BRANDS 32 Quality Portfolio > Curation of Retail
Slide 33: Financial and Medical Services
FINANCIAL AND MEDICAL SERVICES 33 Quality Portfolio > Curation of Retail
Slide 34: International High Street Retailers
INTERNATIONAL HIGH STREET RETAILERS 34 Quality Portfolio > Curation of Retail
Slide 35: Food and Entertainment
FOOD AND ENTERTAINMENT WESTFIELD KOTARA Introduced a new rooftop dining precinct with cinemas, creating a new destination. Focus on design with inspiration from the local Hunter Valley. Centre has shown positive sales growth from the integration of food and entertainment. Kotara MAT $m MAT Retail $
Slide 36: High Street Retailers
HIGH STREET RETAILERS WESTFIELD CHATSWOOD Reconfiguration of less productive space created opportunity to introduce H&M, UNIQLO, Top Shop and Zara. Introduction of unique Asian inspired “hawkers” food market. Growth in centre sales and sales productivity. Chatswood MAT $m MAT Retail $ PSM 2014 20161
Slide 37: Customer Experience – Phil McAveety
CUSTOMER EXPERIENCE PHIL McAVEETY DIRECTOR CUSTOMER EXPERIENCE Enhancing the customer experience
Slide 38: Creating Extraordinary Places, Connecting and Enriching Communities
CREATING EXTRAORDINARY PLACES, CONNECTING AND ENRICHING COMMUNITIES Deliver On The Fundamentals PRODUCT PROGRAMMING CUSTOMER SERVICE TECHNOLOGY EXPERIENCE Personalisation 38 Customer Experience
Slide 39: Data & Insights – David Lamond
DATA & INSIGHTS DAVID LAMOND DIRECTOR STRATEGIC ANALYTICS INSIGHTS AND RESEARCH Enhancing the formula of success through data and insights
Slide 40: Data Analytics & Insights
DATA ANALYTICS & INSIGHTS A strategic focus on using data analytics and insights to enhance key strategic pillars of the operational business: CUSTOMER EXPERIENCE • Better customer experience through listening and acknowledging feedback, BETTER GUEST EXPERIENCE e.g. Net Promoter Score approach HIGHE
Slide 41: Development & Asset Management – Stewart White, Ian Irving
DEVELOPMENT & ASSET MANAGEMENT STEWART WHITE DIRECTOR DEVELOPMENT & ASSET MANAGEMENT IAN IRVING DIRECTOR DESIGN & CONSTRUCTION A large development pipeline with unrivalled confidence in delivery
Slide 42: Development & Asset Management
DEVELOPMENT & ASSET MANAGEMENT • Over 550 people in Development & Asset Management, and Design & Construction – no other comparable platform in retail development • Disciplined operational and financial approach to all aspects of project planning and execution, with an intensive risk management focu
Slide 43: Design & Construction
DESIGN & CONSTRUCTION • Design & Construction (D&C) is a “business within a business” with over 500 employees: • One of the largest multi-disciplined design offices in Australia with over over 200 design professionals • Amongst the top 5 largest commercial construction companies in Australia • Uniqu
Slide 44: Design & Construction
DESIGN & CONSTRUCTION • Scentre Group’s pre-eminent portfolio provides consistent workload in predevelopment and delivery: • Exclusive long-term development framework agreements for the portfolio with a value in excess of $3.0bn • Fixed development and design fee and fixed price lump sum constructio
Slide 45: Active Project: Westfield Chermside
DEVELOPMENTS ACTIVE PROJECT: WESTFIELD CHERMSIDE OVERVIEW Project Cost $355m (SCG Share: $355m) Commencement Q1 2016 Completion Q2 2017 HIGHLIGHTS Incremental Project GLA1 33,000 sqm Completed Centre GLA1 156,000 sqm New Anchors Zara, H&M, Sephora, New Leisure & Dining precinct Specialty Retail appr
Slide 46: Active Project: Westfield Warringah Mall
DEVELOPMENTS ACTIVE PROJECT: WESTFIELD WARRINGAH MALL OVERVIEW Project Cost $310m (SCG Share: $155m) Commencement Q3 2016 Completion Nov 2016 HIGHLIGHTS Incremental Project 14,000 sqm GLA1 Completed Centre 133,000 sqm GLA New Anchors Myer, H&M, Sephora Specialty Retail approx. 70 new stores 1. Gross
Slide 47: Active Project: Westfield North Lakes
DEVELOPMENTS ACTIVE PROJECT: WESTFIELD NORTH LAKES OVERVIEW Project Cost $170m (SCG Share: $85m) Commencement Q4 2015 Completion Nov 2016 HIGHLIGHTS Incremental Project 43,500 sqm GLA1 Completed Centre GLA 84,000 sqm (excl IKEA) 113,000 sqm (incl IKEA) New Anchors Kmart, link mall to 29,000sqm IKEA
Slide 48: Future Project: Westfield Coomera
DEVELOPMENTS FUTURE PROJECT: WESTFIELD COOMERA OVERVIEW Project Cost approx. $425m (SCG Share: $213m) Commencement Q1 2017 Completion Q4 2018 HIGHLIGHTS Completed Centre GLA 54,000 sqm New Anchors Kmart, Target, Coles, Woolworths, Aldi, Event Cinemas, new leisure & dining precinct Specialty Retail a
Slide 49: Future Project: Westfield Carousel
DEVELOPMENTS FUTURE PROJECT: WESTFIELD CAROUSEL OVERVIEW Project Cost approx. $350m (SCG Share: $350m) Commencement Q1 2017 Completion Q3 2018 HIGHLIGHTS Incremental Project GLA 24,000 sqm Completed Centre GLA 106,000 sqm New Anchors David Jones, international mini majors, new leisure & dining preci
Slide 50: Future Project: Westfield Innaloo
DEVELOPMENTS FUTURE PROJECT: WESTFIELD INNALOO OVERVIEW Project Cost approx. $600m (SCG Share: $600m) Commencement Q1 2018 Completion Q2 2020 HIGHLIGHTS Incremental Project GLA 61,000 sqm Completed Centre GLA 109,000 sqm New Anchors David Jones, Event Cinemas, supermarket, international mini majors
Slide 51: Future Project: Westfield Newmarket
DEVELOPMENTS FUTURE PROJECT: WESTFIELD NEWMARKET OVERVIEW Project Cost approx. $600m (SCG Share: $300m) Commencement Q2 2017 Completion Q4 2019 HIGHLIGHTS Incremental Project GLA 57,000 sqm Completed Centre GLA 78,000 sqm New Anchors Department store, Farmers, Countdown, cinemas Specialty Retail app
Slide 52: Miranda Redevelopment – John Papagiannis
MIRANDA REDEVELOPMENT JOHN PAPAGIANNIS DIRECTOR DEVELOPMENT & ASSET MANAGEMENT Creating extraordinary places, connecting and enriching communities
Slide 53: Westfield Miranda
WESTFIELD MIRANDA 53 Quality Portfolio > Major Developments
Slide 54: Westfield Miranda
WESTFIELD MIRANDA 54 Quality Portfolio > Major Developments
Slide 55: History of Westfield Miranda
HISTORY OF WESTFIELD MIRANDA 1964 First opened as Miranda Fair 1969 Acquired by Westfield 1971 Redevelopments undertaken in 1971 (adding Grace Bros), 1981 and 1984 1992 Major redevelopment adding David Jones, Greater Union, Target and 100+ specialty shops becoming the largest shopping centre in Aust
Slide 56: Creating Extraordinary Places
CREATING EXTRAORDINARY PLACES PREMIUM MALL FINISHES THE RIGHT FASHION MIX FRESH FOOD DINING 56 Quality Portfolio > Curation of Retail
Slide 57: Creating Extraordinary Places
CREATING EXTRAORDINARY PLACES DEDICATED EVENT SPACES ENTERTAINMENT PREMIUM CUSTOMER SERVICES DIGITAL ACTIVATIONS 57 Quality Portfolio > Customer Experience
Slide 58: Increase in Market Share
INCREASE IN MARKET INCREASE SHARE IN MARKET SHARE • Overall growth in market share Miranda Total Trade Area Map shows Primary Red shaded areas • Greater proportion of sales now Miranda Total Secondary Blue shaded areas Trade Area coming from beyond Tertiary Green shaded Areas market share % increase
Slide 59: Creating Extraordinary Places – Fashion
CREATING EXTRAORDINARY PLACES CREATING FASHION EXTRAORDINARY PLACES - FASHION Overall strong growth, including from beyond trade area market share % increase 2012 = Actual Sales, 2016 (July) =estimate of annualised position Market share % gain is source Quantium Market Blueprint (share of plastic) 5
Slide 60: Creating Extraordinary Places – Dining
CREATING EXTRAORDINARY PLACES - DINING Strong growth across all trade area sectors market share % increase 2012 = Actual Sales, 2016 (July) =estimate of annualised position Market share % gain is source Quantium Market Blueprint (share of plastic) 60 Quality Portfolio > Curation of Retail
Slide 61: Creating Extraordinary Places – Fresh Food
CREATING EXTRAORDINARY PLACES – FRESH FOOD Strong growth in primary through frequency of customer visits market share % increase 2012 = Actual Sales, 2016 (July) =estimate of annualised position Market share % gain is source Quantium Market Blueprint (share of plastic) 61 Quality Portfolio > Curatio
Slide 62: Miranda Development Highlights
MIRANDA DEVELOPMENT HIGHLIGHTS Retail GLA Pre-development Post Development Incremental Type No. Area No. Area No. Area Majors 9 64,479 9 65,185 0 706 Mini Majors 15 12,313 21 20,963 6 8,650 Specialty 350 28,926 433 42,845 83 13,919 Total: 374 105,718 463 128,992 89 23,274 Turnover Pre-development Fo