The Scentre Group (ASX: SCG) share price has fallen 4.24% on the ASX this afternoon despite increasing its full-year funds from operations (FFO) by 3.9%.
What did Scentre Group report?
Profit attributable to securityholders fell 45.8% on prior corresponding period (pcp) during the year to $2.29 billion, down from $4.22 in FY17.
Scentre Group's FFO per security rose 3.9% to 25.24 cents per security (cps) while management also increased the group's distribution per security by 2.0% pcp to 22.16 cps.
The real estate investment trust (REIT) recorded total revenue of $1.96 billion while earnings before interest and tax (EBIT) came in at $3.07 billion largely due to $1.15 billion of asset revaluations during the year.
Total specialty in-store sales increased 1.5% on pcp while total portfolio sales increased $1 billion to $24 billion for the year.
Scentre Group completed projects including Plenty Valley, Carousel, Coomera, Kotara and Tea Tree Plaza for a total project cost of $1.11 billion during FY18. The group's Newmarket development remains ongoing for 2019 with an estimated $730 million project cost and more than $3 billion remains in the future development pipeline.
The group's asset quality remains sound with total assets increasing by $2.5 billion to $40.98 billion, while net assets rose marginally to $23.64 billion at year-end.
Occupancy rates remain strong at 99.3% at year-end as retail demand has been sustained at Westfield locations around the country despite a broad market deterioration in the retail sector over the last 6 months or so.
Foolish Takeaway
Management has forecast FY19 FFO growth of ~3% with a forecast distribution of 22.60 cents per security, however, I'd be wary of further headwinds in the next 12 months for large retailers.
It's been something of a mixed bag this reporting season for the REITs and I don't think Scentre is necessarily best-placed for an economic downturn given its significant retail exposure.
If you're similarly bearish on the REITs, it might be worth taking a look at these top growth shares that have been tipped as market beaters.
