The Scentre Group (ASX: SCG) share price will be on watch today following the release of its third quarter update.
How did Scentre perform in the third quarter?
Despite the tough conditions that many retailers have reported, Scentre has just completed another solid quarter.
During the third quarter it reported continued growth in customer visits. This metric has now lifted to 535 million customer visits across its portfolio on a trailing 12-month basis.
Unsurprisingly, with such a high number of customer visits, demand for its tenancies remains strong. During the quarter Scentre completed 1,859 lease deals. This left it with 99.3% of its portfolio leased at the end of the quarter.
Scentre's CEO, Peter Allen, commented: "We are pleased to see continued growth in customer visitation demonstrating our focus on delivering what customers want."
Sales update.
It wasn't just customer visits that increased, Scentre reported an increase in sales during the quarter. According to the update, total in-store sales grew 2.4% on a comparable basis for the three months and 1.6% for the year.
This was driven by a solid increase in Specialty in-store sales, offsetting a spot of weakness in Majors in-store sales.
The strongest sales growth came from its South Australian operation. In store sales in that market grew 4.9% over the three months on a comparable basis. This was supported by a 3.9% increase in New South Wales, a 2.2% rise in Queensland, and a 2.5% lift in Victoria.
Over in New Zealand in store sales were largely flat and in the ACT they fell a disappointing 2.4% during the third quarter.
Mr Allen added: "An average specialty store in our portfolio generates annual in-store sales of more than $1.52 million and continues to grow."
Investors will no doubt be hoping this solid form leads to distribution increases in FY 2020. Based on its last close price, Scentre's shares currently offer a trailing 5.8% yield.
