Scentre Group Stock

Thank you for standing by, and welcome to the Scentre Group 2026 Half Year Results Update. [Operator Instructions] Please note that this conference is being recorded today, Tuesday, the 25th of August 2026 at 9 a.m. Australian Eastern Standard Time.

I would now like to hand the conference over to Mr. Elliott Rusanow. Please go ahead.

Good morning, everyone. Welcome to Scentre Group's Half Year 2026 Results Briefing. Before we begin, I would like to acknowledge the traditional custodians of the land I am on and pay my respects to their elders, past and present.

I'm joined today on the call by our Chief Financial Officer, Andrew Clarke, our Chief Operating Officer, Lillian Fadel; and John Papagiannis, Group Director of businesses.

Our focus is to continue generating long-term earnings growth from our Westfield business in Australia and New Zealand and create significant additional value from our substantial land holdings. We compete for people's time. The more people who come to our Westfield destinations, the more often they come and the longer they stay, the more earnings we can generate for our security holders. To do that, we need to keep giving people more reasons to choose to spend their time with us. That means continually improving our destinations, broadening the range of businesses within them, and creating experiences that bring people together. This has been the hallmark of our success for more than 6 decades and remains as important today as when the company was founded.

The connection to our earnings is clear. More people visiting our destinations supports more sales for our business partners. Growing sales attracts more businesses that want to be in our destinations. That demand supports occupancy, rents and leasing spreads and ultimately, earnings.

We have seen that play out since 2022 following the COVID pandemic. Today, 144 million more customers visit our Westfield destinations annually than in 2022, increasing from 408 million to 552 million annually, and this continues to grow. Today, on average, more than 10.5 million people visit 1 of our 42 Westfield destinations across Australia and New Zealand every week. Our business partners generate $7.4 billion more sales annually than in 2022, increasing from $22.9 billion to a record $30.3 billion in annual sales. Occupancy has increased from 98.8% at June 2022 to 99.8% today. And while growing the existing business, we have continued to invest in it. Since 2022, we have invested more than $1 billion across our destinations including significant projects at 12 destinations that are either completed or underway.

Over the same period, we have introduced $3.1 billion of new joint venture capital from long-term institutional partners. This has allowed us to release capital from selected assets while continuing to manage and operate them, strengthening our balance sheet and invest elsewhere in our business. Importantly, while investing more than $1 billion in our destinations and introducing $3.1 billion of joint venture capital, we have continued to grow earnings per security in every year throughout this period. We believe investing for the future should not come at the expense of growing earnings for our security holders today.

Our earnings per security today are more than 15% higher than we delivered in the year to June 2023, the first full year of stability post COVID. For us, that is an important measure of whether we are creating value. The earnings growth we have delivered and the trajectory we are on are the result of the strategy we have executed and continue to pursue.

Our earnings growth is being generated by the performance of our business today. It is not reliant on assumptions of future stabilization or development outcomes. Our objective is not simply to grow the size of our business, we will grow, develop and deploy capital where we believe doing so will enhance long-term returns and value for our security holders and we expect earnings to continue to grow. At the same time, we have another significant opportunity. Our Westfield destinations sits on or are adjacent to more than 670 hectares of land close to already built and in place transport plus water, energy and essential infrastructure. We are looking at how we can use that land to increase the economic activity around our destinations, including through a significant pipeline of mixed-use and residential opportunities. This is additional to the earnings growth being generated by our Westfield business today.

For the first 6 months of 2026, funds from operations were $612 million, up 4.4% and distributions to our security holders were $0.09215 per security, up 4.5%. So far this year, we have welcomed 347 million customer visits, 12 million more than the same period last year and representing a growth of 3.5%. Over the past 12 months, 552 million customers visited our Westfield destinations, a record for our business. Today, our Westfield destinations are more relevant to our customers and communities than ever before. We continue to give people more reasons to visit through partnerships, events and experiences. Our destinations are places where people come together, not simply where people shop.

During the half, we partnered with SBS and SEN to bring the FIFA World Cup to our Australian communities through our Football for Fans experience. Our SBS fan zones attracted 218,000 visits across the tournament. Earlier this month, we announced a partnership with the NFL ahead of its first ever regular season game in Melbourne in September. As the official shopping destination partner and exclusive red carpet partner, we will stream the game live and host free NFL-themed activities across all 42 destinations in Australia and New Zealand. Through our ongoing partnership with The Walt Disney Company, we brought more exclusive experiences to our customers, including Toy Story 5 and Star Wars events. Customers enjoy visiting our destinations to see their favorite artists live. Together with Sony Music, we hosted Amy Shark live at Westfield Tuggerah and Westfield Knox. These partnerships and events give people reasons to spend their time at Westfield that go well beyond traditional retail.

During the half, we also continued to grow our relationship with our Westfield members. Westfield membership now exceeds 5.2 million people. This week, we will launch Westfield World of Wins, a new gamified experience accessible through the Westfield app, giving members the opportunity to win thousands of prizes from businesses across our destinations. It gives our members another way to engage with our Westfield destinations and our business partners, whether they are physically at one of our destinations or not. We will continue to use the strength of the Westfield brand and our network of 42 destinations across Australia and New Zealand to bring more people to our destinations.

More people visiting and spending time at our destinations is translating into sales through our business partners. For the 12 months to 30 June 2026, Business Partner sales reached a record $30.3 billion, $1 billion more than the same period last year. Over the 12 months, business partner sales grew by 4.2% and specialty sales grew by 5.4%. For the first 6 months of 2026, Business Partner sales grew by 3.7% and specialty sales grew by 5.1%.

Over the most recent 3 months, specialty sales were 4.7% higher. And in July, specialty sales were 3.6% higher than the prior corresponding period. Growing sales continues to attract businesses that want to be in our Westfield destinations. Occupancy is 99.8%, the highest June level in more than a decade. Rent escalations increased by 5.5% in the 6 months of the year. We completed 1,401 leasing deals with average positive re-leasing spreads of 3.7%. This is the connection between our operating strategy and our earnings. We attract more people, our business partners grow their sales. More businesses want to be in our destinations, and that creates demand for space.

We continue to invest in our Westfield destinations because they need to keep changing with our customers and the communities they serve. In recent years, we have completed redevelopments at Westfield Sydney and Burwood in Sydney, Knox and Southland in Melbourne, Tea Tree Plaza in Adelaide and Mt Gravatt in Brisbane. All of these destinations are performing well. We have also more than $4 billion of future redevelopment opportunities. We are targeting yields of between 6% and 7% and incremental returns of between 12% and 15%. We will pursue these opportunities where the returns make sense for our security holders.

We continue to enhance the customer offer at Westfield Bondi in Sydney to further strengthen its position as one of the world's preeminent destinations. Works are progressing on our $240 million redevelopment to deliver an elevated dining, entertainment and lifestyle precinct on Level 6 of the centre. This follows the successful repurposing of former department store space on Level 1 to create a new health and fitness precinct. The transformed Level 6 precinct will be anchored by an upgraded Event Cinemas, a new Kingpin entertainment offer and unique dining experiences. It will open in stages from late Q4 of this year. Importantly, Westfield Bondi has continued to trade throughout the redevelopment and both visitation and sales have continued to grow.

In Westfield Sydney, we commenced our $30 million redevelopment at Westfield Penrith, expanding its entertainment and lifestyle precinct and HOYTS cinema complex. At Westfield Tuggerah in the Central Coast of New South Wales, we are repurposing former department store space to introduce Timezone, JD Sports and the relocated Rebel. These businesses will open progressively from the third quarter of this year.

During the period, we also completed the residential component of the redevelopment above Westfield Sydney on behalf of Cbus Property. We will keep investing in our Westfield destinations where we see the opportunity to attract more people, grow sales and generate attractive returns.

Our Westfield destinations are already town centers for their communities. They sit on more than 670 hectares of land close to transport and existing in-place infrastructure. Retail, dining, entertainment and services are already there and hundreds of millions of customer visits are already taking place there every year. This gives us an opportunity to add to the economic activity already taking place around our destinations. We are working with governments across Australia and New Zealand on how this land can also contribute to housing supply and make housing more accessible to more people.

Over the past 24 months, we have identified and progressed a significant pipeline of potential dwellings. This year, that pipeline has increased from 20,200 to 25,600 dwellings that are approved or in the advanced stages of planning. At Westfield Warringah, we have substantially progressed plans for a new town center with a potential for up to 1,600 dwellings.

At Westfield Eastgardens, also in Sydney, we are exploring the opportunity for 1,300 dwellings as part of an integrated mixed-use development and have lodged an expression of interest with the Housing Development Authority of New South Wales for a state significant development. At Westfield Chermside in Brisbane, we have submitted a master plan with the Brisbane City Council for the potential for up to 4,000 dwellings. And at Westfield West Lakes in Adelaide, we have begun planning for the potential delivery of up to 2,000 dwellings. The South Australian government has approved our proposal to commence a formal master planning process for West Lakes.

There is an important distinction here. We don't need these future opportunities to generate earnings growth from our business today. Our existing Westfield business is already growing earnings. The opportunity across our landholdings gives us another way to create even more value over the longer term.

Thank you, and I'll now hand over to Andrew Clarke.

Thanks, Elliott, and good morning, everyone. Funds from operations for the period were $612 million. This is an increase of 4.4% over the first half of 2025. This is underpinned by operating profit growth of 4.5%, primarily driven by strong operating results with average specialty rent escalations of 5.5% and positive leasing spreads of 3.7%. Management fee income grew by 5.8% for the period, driven by underlying growth in property revenue and additional fees following the joint venturing of Westfield Chermside and Westfield Sydney.

Interest expense reduced by $58 million or 14%. This reflects the repayment of borrowings following the joint venture transactions as well as the part period benefit of refinancing at significantly lower margins, all remaining senior and subordinated notes issued during the pandemic in 2020. The increase in tax expense of $4 million is primarily due to our higher management fee income and lower interest expense in New Zealand.

Operating and leasing capital was $86 million for the first half.

As Elliott highlighted, our focus is to continue investing in our Westfield destinations, so they remain relevant to our customers and communities and continue to generate long-term earnings growth. A key part of that is how we manage capital. We have demonstrated our ability to introduce joint venture partners into selected 100% owned assets, while continuing to manage those assets and retain exposure to their performance. That capital can be reinvested into the business into our destinations, the customer experience and opportunities that strengthen the quality and earnings potential of the group, creating long-term returns and value for our security holders.

During the period, the group has made significant progress with its capital management strategy, increasing the group's balance sheet capacity, lowering its funding margin and increasing future period interest rate hedges. The group successfully refinanced $4.1 billion of high-cost borrowings. This included $2.3 billion of senior notes and $1.8 billion of subordinated notes. The group also issued a $750 million 6-year senior note in the Australian domestic market at a margin of 1.2% and renegotiated and extended $1.7 billion of bank facilities at lower margins. These transactions have materially improved the group's weighted average credit margin from 2.6% at 31 December 2025 to 1.6% at 30 June 2026. The weighted average interest rate is reduced from 5.7% in the first half of 2025 to 5.4% in the first half 2026. Included in this was an average base interest rate of 3.3% and an average margin of 2.1%. At 30 June 2026, the group had $3.5 billion of available liquidity. Year-to-date, the group has executed $10.1 billion of interest rate swaps, increasing hedge coverage across all periods. The hedge coverage at June 2026 was 95% at an average base rate of 3.26%, and at December 2026 was 89% at an average base rate of 3.29%.

Yesterday, the group announced the divestment of a 50% interest in Westfield Mt Gravatt for $882.5 million at a capitalization rate of 5.5% and a 3.5% premium to book value. The proceeds of this transaction will initially be used to repay bank debt. The distribution reinvestment plan continues to be in effect for the August 2026 distribution, and will continue to add to the group's sources of capital. The statutory result was a profit of $975 million, which includes an unrealized property revaluation increase of $478 million. All properties were revalued during the half year, of which approximately 50% of the portfolio were independently valued.

Overall, property valuations increased by 1.6% during the 6-month period primarily driven by growth in net operating income. The weighted average capitalization rate for the portfolio remained broadly unchanged and was 5.45% as at June 2026.

Thank you, and I'll now pass you back to Elliott for closing remarks.

Thank you, Andrew. Our strategy is straightforward. We want more people to choose to come to our Westfield destinations more often and for longer. We want more businesses to choose to partner with us, and we want to make better use of the land we already own. Doing those things should continue to grow earnings and create value for our security holders.

The first half of 2026 shows that strategy is working. Based on the group's operating performance in the first half and subject to no material change in conditions, we have upgraded our FFO guidance for the second half of 2026 to at least $0.126 per security, representing growth of at least 4.5%. That will take our full year 2026 earnings to be at least $0.2379 per security, a growth of at least 4.25%. We have also upgraded distribution guidance for the second half to $0.09258 per security, that would take the full year distribution to $0.18473 per security, also representing growth of 4.25%.

We have grown earnings per security every year since 2022. We are continuing to invest in our existing business, and we have significant opportunities ahead of us across our Westfield destinations and the land around them. Our focus is to keep growing earnings and long-term value for our security holders.

Thank you, and I'll now hand back to the operator to open the call for questions.

[Operator Instructions] Your first question comes from Richard Jones with JPMorgan.

Just wondering, Elliott, whether you've updated your thoughts on what role Scentre Group will play in the build-out of the residential opportunities? And maybe if you could touch on what we should be looking for over the next 12 months in terms of is there any progress on specific projects?

Thanks, Richard. So we are working obviously very hard at building out the pipeline of potential opportunities. You've seen that in the first 6 months where we have now increased that pipeline of either approved or in the process of being approved to 25,600, and we would expect that to continue to grow quite significantly, potentially even multiples of that number. And our focus is to continue doing that, and we're doing that.

In terms of the build-out and roles, we are at a very early stage of that because we're articulating what the opportunity set is and in parallel working on specific opportunities like what we're doing at Warringah or West Lakes or at Eastgardens or now even at Chermside. And I think in time, the delineation of who does what where will become a lot clearer. I think what we do know is that because of its interrelationship with our existing Westfield destinations, that interdependencies of both streams of growth are critical to the success -- ongoing success of those 2 streams of growth, particularly the destinations and what we put on the adjacent land. But the specifics of who does what will come in time as we further articulate those opportunities.

Okay. Maybe just a follow on. Just in terms of the CapEx program. You're obviously focusing outside Bondi on small projects. Is that what we should be thinking about going forward? And I guess is something like Booragoon, is that a large-scale redevelopment of not on the near-term agenda?

Yes. I think that what you're seeing is a significant project of Bondi, as you rightly point out, smaller scale, but significant projects at other centers that recurring Tuggerah, what we've completed at Southland and Burwood and continue to repurpose the apartment store space. The opportunity at Booragoon remains a very live active opportunity that we would look to commence in the near future. Similarly, we're seeing a very similar opportunities at other centers opening in New Zealand.

Parramatta obviously, is a very significant opportunity. And so when we look at the pipeline, we do have a targeted approach to how we deploy capital depending on when the opportunity for new space comes up, our focus as we've been saying for a long period of time, is the repurposing of existing space as much as possible because it is a much more efficient way to ensure the longevity of the demand for coming to our destinations and a very efficient way of deploying capital to grow value and earnings for our security holders. And we'll continue to do that, be it larger scale projects like Bondi, Booragoon, Parramatta or smaller scale projects like what we're seeing at Burwood, at Southland and Mt Gravatt and currently occurring at Tuggerah and Penrith.

Your next question comes from Andrew Dodds with Jefferies.

Just firstly, on the guidance upgrade. I was just hoping you could walk us through some of the moving parts. And I guess what's changed in some of the underlying assumptions versus back in February?

Yes. So I'll hand over to Andrew in a moment. I think what you're seeing is that the operating performance of the business is good, and we're in a position where we feel confident for the remaining part of the year. Visitations are up 3.5%. Sales continue to grow. So we're giving people a reason to come and when they come they're spending money and that's seeing a great demand for space from business partners to partner with us very, very high occupancy levels, rents are increasing, leasing spreads are positive. And we see we are in a position where we're more confident in guiding to a higher growth number than at the start of the year. But Andrew...

I think you've summarized it very well. So yes, look, I think the strength of the operating business is very strong. We're seeing that performance come through. We've also seen a little bit of benefit coming through the interest line as well. As you know, we did a significant amount of refinancing. The majority of that refinancing we've used for future period restructuring of interest rate swaps, but there's also a little bit of upside in the current year as well. So it's a bit of a combination across the board.

Okay. Great. And then just on the Mt Gravatt JV you announced last night. I was just hoping to get a bit of a sense on when you expect this to settle and if this is also factored into the guidance upgrade this morning.

Yes. We expect it to settle around 30 September, but it is subject to the ACCC approval, but that's the scheduled date at this point in time.

All right. And then just the last one is just on Bondi. Just how to think about the phasing of the income sort of coming online. I think in the disclosures, it sort of says progressively from the fourth quarter, but just how to think about that ramp up following conclusion?

So the current schedule is for the Event Cinema and Kingpin Entertainment to open by the end of this year. We will be looking to open a proportion of the food and dining in the second quarter of next year and the final bit in the fourth quarter of 2027.

Your next question comes from Tom Bodor with Jarden.

Andrew, just be interested in your Eastgardens project, the 1,300 lots you've got there. I'd be interested in the timing around that, but also do you plan to do some work to the shopping center itself as well? Or is it just sort of a residential off to the side of the site?

Well, so the timing at the moment is what we've lodged an expression of interest to the HTA process. There's obviously a planning period of time that's required as part of that. It sits in a very high demand area for housing. So we see that as being an excellent opportunity to create long-term value for the group. But the timing is obviously determined by the planning process and then go from there depending on the height bulk and scale we eventually end up achieving. But as part of that and as part of the ongoing operations of our Westfield business, we do look to invest capital in making these destinations even more appealing and Eastgardens is no exception to that. So we would continue to invest in Eastgardens, I would say, irrespective of the housing or dwelling opportunity that also is in front of us.

Okay. And then just on your development yield on costs, the range of 6% to 7%. I was interested in if you're sort of thinking about pushing projects higher and -- I mean, obviously, you try to get the best returns possible on all projects. But with where the cost of debt is sitting, if there's sort of an intention to push beyond that range or increase that hurdle, I suppose as the cost of capital is going up.

Well, I think the starting point is how do you attract more people to the destination. So to do that, you need to keep investing in the assets. We're doing it at returns, which are creating value at a 12% to 15% total return that is well ahead of our cost of capital. So in that sense, financially, it's accretive. But as I said in my remarks, we deploy capital where we believe we're going to make money. And so we do have in our thinking what the cost of that capital is. And we take that heavily into account before we press the button on expending dollars and think through what that will do to the destination in order that we're not suffering a decline or a stalling in our overall earnings to security holders.

We don't want to be in a position where we are articulating a narrative where we need to invest a lot of capital into buildings with the hope that they will stabilize over an extended period of time before earnings growth is available to securityholders. I think what we've demonstrated since 2022, the emergence of COVID that we are able to invest capital, we're able to keep our destinations the most attractive places for people to come to. We are able to grow visitations, we're able to grow earnings and we're able to be the places that businesses want to partner with. We do that as a portfolio basis, but even destinations that are undergoing significant works, Bondi, is growing sales, growing income and growing visitations also while going through a major development, and that is the investment thesis and the way we will continue operating this business.

Great. And 1 just final 1 for Andrew. Your receipts in terms of your cash flow went backward slightly based on -- compared to the prior period. Just be interested in any sort of abnormal things that were impacting the cash flow in the period.

Yes. So from a rental income perspective, we've seen growth in cash flow, so growth in line with our property revenue has grown. So that cash flow has been very strong. The lumpiness is more down to the design construction business. So where we had more receipts last year than we had this year just purely based on the timing.

Our next question comes from Ben Brayshaw with Barrenjoey.

Andrew, just looking at your expected credit loss allowance, there has been a reduction in the first half. Could you clarify if you've released any expected credit loss in the operating income?

Ben, no, there's no expected credit loss provision release. That's effectively where we've utilized some of the provision based on debt that we've worked through with the retailers and written off.

And in relation to the second half of the weighted average cost of debt, just given the margin reduction you referenced earlier. Any guidance on where you expect that to come in?

Yes. We continue to expect the full year weighted average cost of debt to be around that 5.4% mark, which is consistent with the original guidance. It's slightly better. And hence, one of the reasons that we're able to upgrade guidance. However, it's within the rounding.

Your next question comes from Callum Bramah with Macquarie.

I just wanted to start by trying to understand about capital management and what you're -- where you're comfortable with kind of on gearing. Obviously, you've recycled or sold quite a number of assets which are kind of broadly neutral maybe to earnings, but dilutive, I guess, the total returns based on the asset return. And I wondered what the expectation is about reinvesting those proceeds?

Yes, Callum, Andrew here. Look, I think as Elliott articulated, our focus is on recycling capital in assets whereby we're selecting 100% own assets. We're identifying where there's an opportunity to recycle capital out of these more stabilized assets and then to reinvest that capital into opportunities that will deliver strong yields, but probably even more importantly, stronger total returns. And those total returns, we expect to be in the 12% to 15% range, which is well above our cost of capital. So the way to think about it is recycling capital at a lower than our weighted average cost of capital and reinvesting in opportunities above the weighted average cost of capital. And that's the way that we've been able to -- one of the key reasons we've been able to continue to grow earnings year-on-year and create value.

Yes. And Callum, I'd probably also add is if you go back to 2020, company faced 2 choices. They either took a very long-term view of their sustainability of cash flow and ability to recycle capital like what we do or they took a much shorter-term view and issued significant amount of equity capital that diluted shareholders. We obviously took the former view. We're able to continue this asset recycling, and we're growing earnings all at the same time. And I think that, that strategy has played out better for long-term wealth preservation and creation for security holders.

And then just a couple of other ones. One, I just wondered, are you able to maybe share how you think about the full year benefit in the '27 of the refinancing that you've done? How -- or maybe how we should think about it?

So I think we've provided you where our margin is today. So that's a pretty good indication. Obviously, it depends on what other activity happens from a debt refinancing perspective, but that's a pretty good starting position. And then the other part, as you can see on our slides that we've given you a very detailed hedging chart, which gives you an idea of where our base rates would be. So those are pretty much the 2 key moving parts.

Maybe just one last one. Just following on the questions around the residential opportunities there. I just wondered, based on your assessment at the moment, are the projects in the money. Obviously, we've had a correction in housing and certainly, in markets like the Northern Beaches it's been quite substantial. Is the required price based on the comments that you've looked at, at the moment, sufficient or is the market price are sufficient to cover the required price to make those projects stack up?

Well, I think the broad answer is yes, because the country is in a massive shortage of housing requires housing supply, and we see the opportunity of contributing to that supply. So the underlying thematic there must be that the market economics will stay in the ability at some point, probably when we're ready at least, if not now, to add that supply.

And have you got those expectations earlier around cost inflation or escalations? What are you thinking over the next couple of years that you're going to see there's obviously a lot of construction activity?

I think what we're seeing is what everyone is seeing, which is the economics of adding housing supply are moving in favor to add housing supply, be it planning, their government policy, be it taxation reform, be it the market itself being a secular change towards the style of accommodation that people are looking to either acquire or even rent that thematic -- all those thematics are tailwinds to the ability to add supply, which is obviously what we're investigating. But as I did say in my remarks, we don't need to do this to grow our earnings. We're looking at this to be in addition to the growth of our Westfield business.

Your next question comes from Solomon Zhang with UBS.

Just looking at Slide 9 on your NOI margins, they seem to have slipped about a percentage point versus last year to 76%. Just wanted to check if there's any call-outs on what's driving that and where that might unwind in the near term?

Solomon, that obviously includes the sale of both Westfield Sydney and Westfield Chermside coming through there. Now those assets are much larger scale assets and so what tends to happen when you have large-scale assets, the expense margin on those assets is lower than the average cost of the portfolio just purely because of the scale. So that's probably one of the main reasons.

The second part is we have seen a little bit of property expense growth come through, in particular, driven by governments-related items. So things like in Victoria, the fire service levy has come through, which is higher. And then also we're seeing the network rates and charges from an electricity perspective, a bit higher.

And then the last part is probably just more of a timing issue, it's between the first half and the second half.

That's clear. And it's good to see the margin savings come through from the refinance initiatives in the first half. Just wanted to confirm just across both the sub notes and the tenure you are seeing is that you at all? How much in terms of an upfront for you was paid in terms of the cash flow from financing activities?

Yes. As we highlighted at the time that we announced both the proposed buybacks in refinancing, it was on an average, it was around just under 15% upfront costs associated with that. And then as we highlighted, the future cash flow savings and benefits more than offset that investment.

Great. Maybe just a final one for me. Just on your post balance date spreads. Clearly, the sales you've given a number there 2.7% above PCP. Just wondering how your spreads are tracking year-to-date or in second half year year-to-date versus your 3.7% for the first half, just...

We've seen that leasing momentum continue. So again, one of the inputs that go into our tone of not only confirming but upgrading our earnings guidance for the full year.

Your next question comes from Howard Penny with Citi.

Firstly, congrats on result. In the Mt Gravatt transaction, you mentioned that initially, proceeds from that transaction will be used to settle some debt. And we've seen previously buying back subordinated notes has been very accretive. There still are some subordinated notes, but those relate more to the refinanced ones. But could you just show us the opportunity of maybe more expensive debt that you could buy back or those subordinated notes. What is the opportunity initially to buying back debt in the short term?

Yes. Howard, Andrew here. Look, there's -- I wouldn't say that there's a specific opportunity that we're focused on in terms of buying back debt. But I think from our actions, we've demonstrated that we're constantly looking at opportunities to find ways to create additional value for our securityholders. And if that is a more expensive debt instrument buyback that makes economic sense, then we'll look to pursue that. But there's nothing specific that we're pointing to at the moment. I think the other part is just as we highlighted that we're creating more balance sheet capacity for the business to keep investing in the Westfield destinations and generate those returns that are very strong in terms of total returns of 12%, 15%.

Absolutely. And then just looking at that slide that you have on the various performances of the categories, there are some notable differences where you see the department stores discount, department stores, footwear coming down, but other categories that seem to have a similar consumer like fashion going up. Could you just give us some insight on what you're seeing in these variable performances of the consumer in your portfolio?

Yes. Thanks, Howard. I think what you're seeing specifically with footwear in the other categories is the other categories selling similar items. And so it's the delineation which is historic in many respects. We are seeing convergence of what business partners actually sell. And therefore, potentially some of the categorizations in the specialty space should actually converge from what the consumer is actually doing. The growth of athleisure as a category, the likes of Lulu or even now the introduction of Alo to the Australian market. They all sell footwear. So I wouldn't look at that being a specific trend.

Having said that, there is a lot of footwear. So it's -- and having said that, despite what the category numbers are showing, we're still expanding footwear operators because it's a contestable space. I think the bigger question or the big issue that you're highlighting is our business has been growing for many, many years on the back of more dedicated brands to the categories with which people want to spend their time and effectively their money in being those specialty or larger, many major style business partners, and that has seen, at the same time, the growth in specifically department stores and to a lesser extent, the other measures be somewhat anemic. And our business has been able to grow quite efficiently on the back of that because as we know, those smaller businesses are a more economic partner to us, and their growth has seen our earnings be able to grow because of what they're doing to the customer needs.

At the same time, the majors are important, but we know that they're becoming less and less important as we grow the business and giving people a reason to come and spend more time with us. And I think what you're seeing is that trend play out in that narrative of what I've just said.

Last question for me. Just regarding capital inflows. You've had some great success in these partnerships, including yesterday's announcement. And we've seen your peers also raising capital for retail assets. Do you think we're starting to peak in that sort of investor demand for direct retail? Or do you think we still will see more transactions and more momentum from third-party capital into the asset class?

Howard, look, I think based on the volume of inbound inquiries and I suppose, meeting requests that capital partners want to meet with us and I suppose, become future partners of Scentre Groups. I would say that it's not slowing down at all. If anything, it's probably getting -- the demand is growing even further.

Congrats again.

Your next question comes from James Druce with CLSA.

Can I just follow up on some of the questions on apartments. I mean the message seems to be -- we're just going to get all these approvals and then we'll figure out what to do with them. Why not just keep -- I mean you've got 25,000-odd approvals. Why not you start kicking things off today? Like what are you waiting for?

Well, I don't think we're waiting. I think we're working in parallel paths, but there's a lot of work to do to get to a point where you start pouring concrete or digging. And so I wouldn't take from what I've said that we're going to get all the approvals, and we'll figure out what we're going to do. I think it's fair to say that we are working right now a parallel track of the execution of these approvals for the delivery because the macro thematic is, as I said, not only right, but it's increasing to be even more attractive. So I think what I'm trying to articulate is that we're not at the point of being able to on this call, specifically articulate who will do what, where and when, but rather to give you the confidence that we are working quite aggressively on how we get to a point of commencing these opportunities in the near future.

Okay. Okay. And just maybe a broader question. I mean, house prices are falling in a bunch of places. You've got a pretty broad portfolio with tremendous insights. How are you seeing the consumer react to house prices. I mean, the top line sales still look pretty robust. But what are you seeing in terms of the mix? And any insights that you have on the demographics would be interesting.

Well, I think there's a couple of components to why people come. And we've said this many, many times in the past that in order to attract people to our destinations, there has to be a reason over and above the tour of buying a food or clothing oneself. And we're seeing that change in our portfolio quite deliberately to create a greater reason for people to spend their time, which is what we're really competing for in a way which is enjoyable and promotes a repeat of that same behavior as many times as possible. And so we play on the fact that we are in close proximity to millions of people. We do have essential things that go on in our destinations, but we have a lot of others, which are more discretionary in nature.

But coming to a Westfield destination, it's free. And we promote why people should come. And I think what we're seeing is that there is a reallocation of what people are spending not only their time but their money on. And we do all read about what's happening in house prices and the like. But what we're seeing at the moment and what we've seen in the past is that during these types of periods, our business performs very well because people do like to spend their time outside of their home. And if they're doing it at our destination, they tend to spend money. And arguably, in their minds, they have more disposable income with which to use rather than saving up for a deposit for an upcoming mortgage that may or may not being pursued at the moment.

Okay. That's great. One quick one, if I may. I think at the start of the year, you're guiding to like-for-like growth of around 4%. Any changes for the year-end? The NOI?

Yes, look, our overall growth, as we've highlighted that we're upgrading both FFO and distribution growth. And we are seeing that the underlying performance of the business is slightly better than where we originally guided. So I would say it's similar, if not slightly better.

Your next question comes from Simon Chan with Morgan Stanley.

What's your spec occupancy costs across the portfolio? I can't seem to find it in the press release.

It's 17.1%. And I'm trying to think where -- which page it is in our disclosures, but it is 17.1%.

Yes. Okay. It's definitely there. Really, it must have slipped off. How do you guys see this ratio because I remember back probably 5, 10 years ago, right? As soon as you get to about 18% spec of costs, that also coincided with periods of negative leasing spreads and we all end up in tiers, et cetera. Do you think that historic benchmark of about 18% is still right? Or do you think that number is actually closer to 20% or closer to 16%. Now how do you think about retailers' health at the moment?

Well, obviously, it comes down to the amount of sales, those business partners are able to generate and their profitability. What I would say is that the correlation of the 18% to the tiers that you've articulated is probably better correlated to a great amount of new space that was being added rather than the occupancy cost being increasing. So the -- our focus is obviously to have our business partners be as successful as possible because when we know when they are, the demand for space goes up like we're seeing, we are operating at almost full and those conditions mean that businesses are fighting over a limited amount of new space that might become available. And we'll either want to keep it if they've got it, or we can bring in a new business, which is more aligned to what the market is or what the customer is spending money on. So obviously, our focus is drive a number of people coming, get businesses to be able to translate that into greater profitability for themselves. And by doing so, generate even more rent, which generates even more earnings for our securityholders.

Just so I'm hearing you, you're basically saying with tighter occupancy or vacancy, you believe that a tolerable occupancy cost in theory should be higher than those periods where -- that I was quoting before?

I think it's absolutely right. And I think it's -- our focus on driving more people to come is generating more sales, is generating better rents. They do escalate in the -- through the mechanisms in our lease structure where it's resigning new tenants or new leases at a positive leasing spread. And we believe that, that 17.1% has room to move and we are focused on having that to occur.

Cool. Just my last one, I don't mean to be nitpicking an otherwise pretty good result, but the upgrade seem quite small. Now and then I take a look at your CPI plus fixed escalators of 5.5% that you achieved during the first half. Was that not have given you the avenue of a bigger FFO upgrade? Because certainly, you probably would not have been forecasting 5.5% rental growth for specialties back in January.

Well, I think the wording says at least. So I'm not sure how much more you want to us to say at this juncture. But obviously, we're giving a forecast of which we have a higher area of confidence of being able to achieve at least of.

Your next question comes from Adam Calvetti with Bank of America.

Just on your further divestments, I mean, there's not a lot of 100% stakes left to continue divesting some of those residential schemes on them, which I'd like to hear your commentary on whether or not you'd like to keep them as 100% ownership. I mean, would you go to 25% stakes on some of the other properties to continue to recycle capital?

Adam. Look, there is actually still quite a lot of -- there's another 9 assets that we still have 100% ownership of. There's a significant amount of capital that's still sitting there. But look, the reality is we have the opportunity to continue the joint venture over time. It's -- yes, it's about us planning the way that we recycle capital at the right time in the asset life cycle to make sure we're recycling capital at a rate that we can then invest in better returning opportunities to grow the business over time. So the capacity to recycle more capital is significant. We don't need to go down to 25% share. So that's not really something that we've thought about at this point in time. And things like -- another good example, Westfield Sydney. We only sold 19.9% share of that. So that in itself is not in the 9 that I spoke about. And I'm not trying to guide to another JV there, but I'm just letting you know that it's another opportunity in addition.

Are you in any...

Sorry, and what I might add is, we well flagged this as part of our long-term capital management strategy back in 2020, reiterated all the way through, and we've executed. So I think that where we're at now is that if we choose to use that lever, it will be done in an opportunistic manner.

That's clear. And on those 9 assets, are you in conversations with any capital partners at the moment?

We can't comment on that, and I wouldn't be guiding to that either.

Okay. Great. And then just on sales. So it looks like you've had a weaker second quarter, what's the outlook for sales internally in the second half?

Well, when you say weaker, I think you're referring to 5.2% growth going to 4.7%, which is still a very robust growth number. So we're not really seeing a weakness. What we're seeing is growth on growth. And we are comforted by obviously, the July experience. But even more importantly, our customer visitations continue to grow week on week in excess of 3.5%. So a lot more people are coming than they came last year, and so we're still seeing growth on growth. We're still seeing very good demand for businesses to partner with us and the business that wants to partner with us is wanting to do so because they believe the ability to transact with a customer through a sale is obviously quite strong. So we're seeing that trajectory continue.

Great. Congrats on results.

Your next question comes from Thomas Ryan with Green Street.

So in terms of your overall portfolio, one of the pieces I wanted to pick up on was just around how you're skewed towards your portfolio sort of weighted cap rate at 5.4%. And what you've also just mentioned in the call is your weighted average cost of debt is pretty much at the same level. So how does that sort of sit with you notwithstanding your income growth profile, but are you sort of looking at potentially moving around those assets based on your earlier comments?

And also just a second question from me is just back on to the occupancy cost. Do -- notwithstanding its great conditions at the moment with 99.8% occupancy, how do you think about that and those sort of metrics leading into the fact that it is such a buoyant market at the moment? And things might change.

So to answer your first question, the cost of debt versus the stated cap rate in our current value accounts, doesn't take into account the fact that the asset, its income grows and the debt cost remains stable. And we're obviously investors for a very long-term and we manage the balance sheet in order to fund our investments in terms of our ongoing business strategy in order to maintain our exposure to what I would say is the best portfolio of destinations in our region. And so get costs versus cap rates is not really an equation. We look at rather what we focus on is how do we grow and continue to grow the cash flow and sustainability of that cash flow through reinvestment from the destinations that we operate.

The other part to also bear in mind is that are the manager and operator of these destinations. It's an operating business that we are, which is not necessarily captured in that cap rate calculation that you are looking at. And in our compendiums, that we publish on an annual basis, you'll see the differential in the amount of income we're actually generating versus the cap rate that a third-party value ascribing to that particular asset.

In terms of the conditions being buoyant. What I would say is that we're making this occur. We're making this occur because we're driving more people to our destinations. We're doing that through being very focused on giving people a reason why they should come to our destinations and making sure our destinations are operating and present in a way that when they come, they have such a great time that hopefully, they come back. What we haven't said is that our Net Promoter Score is running in the 60s at the moment, and we're growing customer visits. That is the lifeblood of our Westfield business because, as I said, more people coming, more businesses want to partner with us, more earnings growth for our security holders. And we are absolutely focused on keeping that relationship going and making that occur. We've done that over decades. We have done that in the numerical numbers that I've described particularly since the reemergence of the economy post-OVID, and we will continue doing so.

And just a follow-up, just in terms of the 5.5% specialty escalations notwithstanding that's a great outcome for you guys, just in terms of the actual retail holdback under Simon's earlier question, have you had any pushback on that from your specialties? And how does that sort of compare to your peers and have your tenants have flagged that, that's a concern?

Well, so the 5.5% is an outcome of our mechanism, which other than Victoria is CPI plus 2% on average. We have maintained that same mechanism throughout. We didn't change it. And we're very strong on maintaining that mechanism because we believe that mechanism is in the best interest of our securityholders and the long-term growth trajectory of earnings for this business. And we can do that because we're at 99.8% occupied. So our ability to do that when we were at 98.8% was a little bit more challenged. And you saw that with the leasing spreads.

Now what you're seeing is almost full or practically full. Our mechanism of CPI plus 2% being maintained and re-leasing spreads positive and at the same time, all being done as sales continue to increase because we're pumping more people through to our destinations. So to say our value chain in reverse order. But the sense I want to give you is that we will focus on maintaining that equation because we know it grows earnings to the benefit of our securityholders, and that's what we'll keep doing.

There are no further questions at this time. I will now hand back to Mr. Rusanow for closing remarks.

Well, thank you, everyone, for taking the time and listening to this call today and the questions that have been asked. We look forward to catching up with many of you in the coming days, and we wish you a great day. Bye.

That does conclude our conference for today. Thank you for participating. You may now disconnect.

Good morning, everyone. Welcome to the Annual General Meeting of Scentre Group Limited. My name is Ilana Atlas, and it is my honor to be the Chair of Scentre Group. The Company Secretary has informed me that a quorum is present, and I declare the meeting open. Our AGM is being held as a hybrid meeting. I'm conducting the meeting from the Wesley Conference Center in Sydney, and security holders can also participate online and ask questions on the telephone line.

On behalf of my colleagues, I acknowledge the Gadigal people of the Eora Nation as the traditional custodians of the lands we are on. I recognize that people viewing the webcast of this AGM may be on different lands of different traditional custodians. I pay my respects to each of their Elders, past and present, and I extend that respect to Torres Strait and Aboriginal peoples here with us today or participating online.

I'll now ask Maureen McGrath, our Company Secretary, to run through some housekeeping matters.

Thank you, Ilana, and good morning, everyone. As the Chair has indicated, I'll run through some housekeeping and procedural matters. For those of us who are attending in person, in the event of an emergency, the Wesley fire-wardens will provide us with directions. Voting on all resolutions will be by way of poll.

I will now run through how security holders can vote and ask questions, whether you're attending in person, online or by telephone. For those security holders attending in person, you can vote on your device through the Computershare platform by scanning the QR code on the blue voting card, and this will take you to an online voting page. Once the Chair declares the polls open, all items of business before the meeting will be displayed on your mobile device along with voting options.

To cast your vote, select one of the options. Your vote will be automatically recorded and a voting confirmation will appear on your screen. You're able to change your vote up until the time the Chair declares the polls closed. If you do not have a mobile device or are having problems, you can complete the voting form on the back of your card, and you'll need to give the completed form to a Computershare representative. To ask a question, please approach the microphone attendants and show your attendance cards.

Before you ask a question, if you could please state your name. If you're unable to get to a microphone, we will bring one to you. Security holders participating online can vote by selecting the vote icon, and the voting options will appear on your screen for you to select. A tick will appear to confirm receipt of your vote. Again, you can change your vote up until the time the Chair declares the polls closed. You will need to go to the click here to change your vote and choose a different option.

Questions can be submitted through the online platform at any time during the meeting until the end of questions. [Operator Instructions] Although you can submit questions from now, they will not be addressed until the item is being discussed. Questions may be moderated or if we receive multiple questions on one topic may be answered together. [Operator Instructions]

Proxy holders with directed votes will have those votes voted as directed. All open votes held by a proxy holder will be voted according to the options selected by you. Mr. Barry Azzopardi, a party of Computershare has been appointed as the returning officer. Following confirmation by Computershare, final proxy and voting results will be announced to the ASX later today.

I will now hand back to our Chair, Ilana Atlas.

Thank you, Maureen. On stage with me this morning are my fellow nonexecutive directors, and I welcome them all, Carolyn Kay, Gae Russo; Julie Coates, who was appointed Non-Executive Director in October last year and is standing for election; Mike Ihlein, who is Chair of our Audit and Finance Committee and is retiring from the Board today; Mike Wilkins, AO, who is standing for reelection; Margie Seale, Chair of our Risk and Sustainability Committee; Catherine Brenner, Chair of our Human Resources Committee; and Craig Mitchell.

Next to me is Maureen McGrath, our Company Secretary. And I'd also like to welcome Elliott Rusanow, our Chief Executive Officer, who will speak following my remarks. Members of the Scentre executive team are with us today, and I welcome them. Andrew Clarke, Chief Financial Officer; Lillian Fadel, Chief Operating Officer; and John Papagiannis, Group Director of Businesses. Other members of the executive team and Scentre team have joined us today in person or online, and I also extend my welcome to them all. Mr. Scott Jarrett, representing the group's auditors, EY, is here today.

Maureen, as Company Secretary, has already run through housekeeping matters with you, and I'll just outline some additional procedural matters. The notice of meeting has been made available to security holders and will be taken as read. I would ask that any questions relate to the item before the meeting. All questions should be addressed through me as Chair. I now move each of the resolutions in items 2 to 5 of the Notice of Meeting and open the polls in respect of each of those resolutions.

As Chair, I've been appointed proxy by several security holders. These include directed and undirected proxies. As set out in the Notice of Meeting and proxy form, all undirected proxies will be voted in favor of items 2 to 5. I now vote all those undirected and directed proxies. Following the consideration of the items of business before the meeting, time will then be set aside for you to cast your vote before I close the polls.

The group continues to monitor the current challenging geopolitical and macroeconomic environment and the potential impacts this may have. Importantly, our business has continued to perform strongly during the early part of 2026. Our purpose, creating extraordinary places and experiences that connect, enrich and are essential to our communities continues to guide Scentre Group's focus on delivering growth for security holders in a responsible and sustainable way. The group delivered strong financial and operational performance in 2025 and made good progress on strategic priorities. Funds from operation were $1.188 million, $0.2282 per security, up 4.9% on the previous year. Distributions for the period were up 3.4% to $0.1772 per security. Our total securityholder return for the year was 28.3%.

In addition to the strong operating performance, the group made progress on longer-term initiatives to grow economic activity at our destinations. These initiatives include ways to grow our core operating business and the unlocking of additional opportunities for growth from our strategic landholdings. Elliott will speak in more detail about our 2025 results as well as year-to-date performance and our outlook following this morning's release of an operating update.

I want to recognize Elliott and the entire Scentre team for these results. This is the fifth consecutive year of earnings and distribution growth. The team continues to create value for all stakeholders, our communities, customers, business partners and security holders. Sustaining a high-performing culture where talent thrives is a priority for the Board. Pleasingly, we received an employee engagement score of 96%, which places us amongst the top companies globally for the fifth consecutive year. Continuing to invest in our people and growing our talent and team capabilities is critical to the pursuit of operational excellence and growth.

As examples, at the end of 2025, we announced 2 senior leadership changes. Lillian Fadel was appointed Chief Operating Officer with our accountabilities expanded from customer community and destination to also include asset management, development design and construction as well as data and analytics. The role and responsibilities of our CFO, Andrew Clarke, were expanded to include leadership of our strategy to broaden the economic activities and usages across our landholdings as well as our long-term strategic plan. Congratulations to you both.

Spending time with our teams in Westfield destinations is one of the most rewarding aspects of our role as Board members. It offers firsthand insight into our communities, future plans and the care our people bring to delivering the Westfield experience every day. In 2025, we held Board meetings at Westfield Marion and Westfield Warringah and directors visited many other destinations through the year. More visits are planned in 2026. In February, the group published its sustainability report as part of our 2025 annual report, in line with the new Australian sustainability reporting standards. The Board recognizes the substantial program of work undertaken to prepare for the transition to these new reporting requirements, especially the cross-functional effort invested in establishing the governance, systems and assurance foundations needed to support the change.

Community and connection remain at the heart of our business. In 2025, our community recognition and grants program, Westfield Local Heroes, marked its ninth anniversary. In this time, the group has invested more than $9.8 million into the resilience and vibrancy of the communities we serve. Each Westfield destination is unique. And our community plans and cultural calendars reflect the diverse communities we serve. This is one of the contributing factors to the growth in customer visitation to 540 million visits during 2025.

We take our responsibilities as a community destination very seriously. In early February this year, the New South Wales state coroner concluded the Bondi Junction inquest into the attack of 13th April 2024. We again extend our deepest condolences to the families and loved ones of the victims and all those impacted. On the second anniversary, the Governor-General announced a special Australian Bravery Decorations honors list. We note the significance of recognizing these individuals and thank them all most profoundly. We recognize all who displayed great courage and bravery through their actions on that terrible day, including members of the public, first responders, New South Wales Police, our business partners and particularly at the Securityholders Meeting of Scentre Group, our own team. We acknowledge and thank them all.

During 2025, we fully supported the careful work of the coroner. A summary of how the group has supported its people throughout this period as well as safety and security initiatives introduced since the attack are outlined in our annual report and on our website. The safety and security of our customers, our business partners and our team remains the highest priority of the Board.

I mentioned earlier that Mike Wilkins and Julie Coates are standing for reelection and election to the Board today. Appointing directors with an appropriate mix of skills, knowledge, experience and diversity aligned with the strategic direction of the group is our objective. Julie joined the Board in October last year. Further information about Julie and Mike is contained in our Notice of Meeting, and each of them will speak to later in the meeting. Mike Ihlein will today retire from the Board and as Chair of the Audit and Finance Committee and will be succeeded by Craig Mitchell in this role.

On behalf of my fellow directors, I'd like to congratulate Mike and thank him for the significant contribution he's made to our Board. He's been a Director of Scentre Group since its inception in 2014. Mike was the inaugural Chair of the group's Risk and Audit Committee, which preceded the Audit and Finance Committee. He is an exceptional director. His strategic, commercial and financial acumen has been highly valued by his Board colleagues and management.

During his tenure, Mike has been instrumental in key moments of our company's history from the complex transaction resulting in the formation of Scentre Group in 2014 to working closely with management during the pandemic and more recently, on a seamless CEO transition to Elliott's leadership in 2022, Mike's advice and judgment has been a crucial element. Mike's professionalism, unwavering commitment to the Board and to the work of the Board and also his legendary attention to detail. Will be much missed. Thank you, Mike, from us all. Thank you.

The Board is very proud of the role Elliott and all members of our team play across Australia and New Zealand, supporting customers, communities and each other. The group's dedication to attracting more people more often and for longer to our Westfield destinations is delivering long-term value and growth for you, our security holders. Thank you to the team on behalf of us all. To my Board colleagues, thank you for your commitment to Scentre Group, your diligence and your good judgment. And to you, my fellow security holders, thank you for your ongoing support of our company.

I'll now pass to Elliott to share his remarks. Thank you.

Thank you, Ilana, and good morning, everyone. Our strategy is to grow the economic activity that occurs at each of our 42 Westfield destinations located throughout Australia and New Zealand. This continues to deliver strong operating performance and growth in earnings. We are also focused on maximizing the long-term economic opportunity from the land that we already own. We believe this is a significant and competitive advantage, and we are pursuing this opportunity to generate long-term value and growth for security holders.

For the 12 months to 31 December 2025, funds from operations was $1.188 billion, representing $0.2282 per security, up 4.9% on the previous year. Distributions for the period were $923 million, representing $0.1772 per security, up 3.4%. These results represent the group's fifth consecutive year of earnings and distribution growth. During 2025, we welcomed 540 million customer visits, an increase of 14 million visits or 2.7% growth compared to 2024. I would like to thank and commend our team for delivering these results.

Creating more reasons for people to spend more of their time with us continues to unlock value for our business partners. The more customers that visit our destinations, the more our business partners can connect and transact with those customers efficiently and at scale. In 2025, our business partners achieved sales of $30 billion, a record for the group. Portfolio occupancy increased to 99.8% as at the 31st of December 2025, our highest level since 2013. We continue to strengthen engagement with our Westfield membership program with membership now growing 11% to over 5 million people during the course of 2025 and in the early part of 2026.

We have a number of new initiatives planned in 2026 to create even more compelling experiences for customers and the communities that we serve. Today, I am pleased to share that Westfield destinations will celebrate the world's biggest sporting event in June and July this year with the FIFA World Cup. In partnership with SBS, matches will be broadcast live across fan zones and supported by a calendar of activity associated with that event. We are looking forward to inviting our communities to join and come together to support their favorite teams, hopefully, Australia, at -- and experience only at Westfield.

During 2025, we remain focused on repurposing existing space to enhance the customer experience and increase the productivity of our destinations. During the year, we completed the expansion of Westfield Sydney, featuring a 2-level Chanel boutique, a new Moncler store as well as a new Omega boutique. We have taken the opportunity to strategically downsize David Jones at 3 destinations to introduce in-demand and highly productive stores. The redevelopment of Westfield Sydney -- sorry, Westfield Southland in Melbourne delivered a new family, dining and entertainment precinct and resulted in visitation growing by 6.5% during the course of 2025. The redevelopment at Westfield Burwood in Sydney welcomed new brands to the center, such as Aldi, an expanded JB Hi-Fi, Nike and Rebel and underpinned a visitation growth in 2025 at Westfield Burwood of 9.3%.

The group also completed the redevelopment of the first level, Level 1 at Westfield Bondi also in Sydney. The repurposed space features a health, wellness and fitness precinct, including a global-first Virgin Active social wellness club, a new Rebel rCX concept store and contribute to visitations at Westfield Bondi increasing by 8.5% during 2025. Following the success of our Level 1 redevelopment, we have commenced a $240 million investment to redevelop the entirety of Level 6 at Westfield Bondi to create a world-leading lifestyle, entertainment and dining destination. Our vision is to use -- is to expand the uses and experiences we offer at Westfield Bondi to further its position as the premium asset in Sydney.

Our 42 Westfield destinations are already the highest quality portfolio in both Australia and New Zealand. Our portfolio is irreplaceable. Our destinations are located in close proximity to 21 million people across both countries and are located on more than 670 hectares of land, adjacent to not only our destinations, but more importantly, major transport and other infrastructure. Approximately 60% of this land is currently utilized, including for car parking, and we are working to maximize the long-term economic opportunity of this land that we already own through strategic master planning for the future. We are exploring a multitude of potential usages, including the potential for student accommodation, health, other education and residential as some examples.

In 2025, we lodged planning proposals at a further 6 Westfield destinations with the potential of those 6 to deliver 16,100 dwellings in the future, and we will continue to do so. This builds on the zoning permissibility already received for Westfield Hornsby and at Westfield Belconnen that we discussed at last year's AGM. We aim to reduce our environmental impact by operating our Westfield destinations as efficiently as possible. During the year, we made progress on our environmental initiatives and target to achieve net zero Scope 1 and 2 emissions by 2030 for our wholly owned Westfield destinations. And we have exceeded our interim target, which was for a 50% reduction of Scope 1 and 2 emissions by 2025 with our actual achievement of a 57% reduction across our wholly owned Westfield destinations since 2014 as the baseline.

This morning, we released an operating update for the first short period of this calendar year 2026. Customer visitations to our 42 Westfield destinations from the beginning of 2026 up until last Sunday, which was 19th of April, is 160 million visits, representing 4.9 million more visitations than the same corresponding period in 2025. Total business partner sales across our portfolio for the 3 months ended March 2026 were $7 billion, which is up 5% and our specialty stores were up 5.3% during that period. That's compared to 2025.

In March, total business partner sales increased even further by 5.4%. Demand for space in Westfield destinations continues to be strong with portfolio occupancy at 99.8% at 31 March 2026. This is an increase of 20 basis points since 31 March 2025. Average specialty rent escalations in that first quarter of this year were up 5.3% and the group completed 636 leasing deals, averaging specialty re-leasing spreads of positive 3.3%.

During 2025, we introduced approximately $2.2 billion of new capital into the group through the joint venturing of assets at Westfield Chermside in Brisbane and Westfield Sydney, delivering a key part of our long-term strategic capital plan. The group continues to pursue its capital management strategy, including the potential opportunities to further refinance our senior bonds and subordinated notes. In early February, the group settled the divestment of a 19.9% interest in Westfield Sydney to the Australian Retirement Trust, a new strategic partner for a consideration of $864 million and representing a capitalization rate of 4.69%. In March, the group completed the redemption by way of make-whole of our USD 750 million, which represents around AUD 1.15 billion of our 2030 maturing senior bonds.

In April, the group successfully issued just last week a AUD 750 million bond for a 6-year domestic Australian note at a credit margin of 1.2%. During the period, the group divested its $50 million investment in the Dexus managed fund that acquired the second 25% interest that was transacted last year at Westfield Chermside in December '25. Our customer-focused strategy continues to deliver strong operating performance across the portfolio. Based on the group's performance, operating performance in the first quarter of 2026, the group maintained its target for funds from operations to be at least $0.2373 per security, which would represent a 4% growth over 2025.

Distributions are expected to grow by 4% during 2026 to $0.1843 per security. The group acknowledges the current geopolitical volatility, its impact on the broader economy and in particular, the potential impact this may have on the consumer. The group will continue to closely monitor any impact this may have on our business and our outlook in 2026. On behalf of the entire Scentre team, I thank you for your support. Thank you.

Thanks, Elliott. Yes, I think deserves. I'll now turn to the items of business before the meeting and the proxy results for all resolutions before the meeting are now shown on the screen. While I've opened the voting on items 2 to 5, we'll proceed to discuss each item in turn. Questions from security holders will be taken on each item of business, and all questions should be addressed to me as Chair.

Item 1 is a discussion of the group's 2025 financial statements and reports. This item is not the subject of a vote. Scott Jarrett from EY, the group's external auditor, is available to respond to any questions relevant to the preparation and content of the auditor's report and the conduct of the audit. I'll now ask any security holders on item 1, the discussion of the group's 2025 financial statements and reports to make their way to the microphone, submit their questions online [Operator Instructions].

Thank you, Madam Chair. I'm trying to organize myself a little bit. Firstly, yes, I'd like to thank you and the Board and your team for the outstanding results. I've just got a few questions and not to take away from the outstanding performance, I don't want these to sound particularly picky. But in your property valuations, which we take all sites are valued each year. Page 137, you had the carrying value $33,666.9 million from $34,245.3 million, which is a difference of $578.4 million. But on Page 142 on the significant items...

Sorry -- Ms. Lee, how are you? Nice to see. What page are you on, sorry?

Page 137 and 142 on the significant items. And under significant items, yes, the change is $455.7 million. So there's a bit of a variation there.

Sorry, I'll get Elliott.

So I think what you're looking at is a balance sheet item on Page 137, which is the actual carrying value and 142 is referring to what would be recorded in our statutory profit and loss. So it's effectively a movement during the year rather than a balance sheet item. So it's effectively an accounting standard measure of income impact versus -- on Page 142 versus a balance sheet capital item on 137.

Okay. The next matter concerns your gender pay gap, which was between 21% and 27%. And whilst I note that you have done a lot of work to decrease that. I understand on a sort of a national average, it's about 12%. I don't know what the industry average is, but it seems that that's quite a bit higher than what you're experiencing. So I was just wondering how that compares? And are there particular structural issues which are preventing you from reducing it further?

The gender pay gap?

Yes.

So yes, in the sense, there are structural issues in that we know in most organizations, men are in higher-paying roles. So as an organization, we have gender parity. In other words, like-for-like, everyone gets paid the same. But because there are a greater number of men in higher-paying roles, that means that there is a gender pay gap. We're working hard at decreasing that. We are quite strong in our sector. And part of that is ensuring that we continue to promote more women into senior roles, which is what we are doing.

Yes, which I agree with. Okay. Yes. Just your report talks about your gas boilers and infrastructure requiring there's a requirement possibly to upgrade in about 2028, and it's been flagged that this may be needed. I take it that some sort of provision has been made for that as sites are upgraded or it's all part of a -- it's not a lumpy capital item.

So every year, we allocate operating and maintenance capital, which goes to upgrading all the centers. So that will be allocated towards that type of maintenance. Are there any questions online?

Yes, there's a question from Stephen Mayne. When did we last tender the external audit? And when are we next scheduled to tender the audit?

Thank you. Thank you for the question, Mr. Mayne. So EY have been our auditors since inception of the company, so that's 2014. They are long-standing auditors of the company. However, interestingly, we have had 4 different EY audit partners in that period. So to the extent that the point around tendering audits is to get a fresh pair of eyes, we have had a fresh pair of eyes about every 3 years from the EY firm. As an Audit and Finance committee and as a Board, we do consider tendering the audit. The most recent opportunity to do that was the recent change of audit partner from -- at EY to Scott.

The reason why we didn't was that the previous audit partner left reasonably suddenly, and it takes a long time to effectively tender an audit. So we did not tender at that point. Scott has just started on the account, and so we intend working with him and ensuring that we give him the opportunity to get to know us better and be an effective audit partner. So that's the current state of the audit.

Chair, there's currently no further online questions and no phone questions.

Thanks, Maureen. So would you tell me if there are -- on the phone. Thank you. Are there any other questions from the floor? Mr. Kingston.

David Kingston, K Capital. Look, I think it's been an okay year, but considering Westfield's iconic assets, to me, the overall results are still disappointing. Shareholders here have received distributions each year, but minimal capital growth. CEO stated in his address, this is the fifth consecutive year of growth, and that's correct, spelled out in the annual report. But to be fair, those stats are coming off the COVID years. So I don't think the 5-year analysis is appropriate coming off such a low base.

The better view -- the better measure, in my view, is the 10-year stats, and they're disappointing, very disappointing. Scentre is still way below its price -- share price in the high 4s that it was 10 years ago, still way below the price that Frank Lowy sold at many years ago. I accept the stock price rose nicely in the first half of the past year, but it's lost its gains in the recent months, which I accept is partly due to the higher interest rate environment.

Let's look at the good side. Well done. Gearing has reduced and FFO has increased. Good to see $2.2 billion of new capital introduced via joint ventures. So gearing reduced, albeit it's still significantly higher than most REITs. Scentre's debt and sub debt is nearly $15 billion. Again, well done, FFO has increased by 4.9%. But in my view, it's more appropriate to focus on adjusted FFO, which I think a lot of the other REITs do focus on, whether it's GPT or region. FFO, in my view, is a little bit not misleading, but it's not, in my view, the best metric. But it's good to see that further FFO growth is targeted in '26 of another 4%.

Let's get to the issue of why has Scentre underperformed in share price so poorly for 10 years. Clearly, there's some pretty substantial head office costs that come out. But in my view, one of the really big issues, Chair, is the ongoing very large CapEx. It really is a CapEx sink. CEO's address states we have taken the opportunity to strategically downsize David Jones at 3 of our locations. It's a nice euphemism from the CEO, given the well-publicized challenges that David Jones faces.

What concerns me, and it's in the CEO's address, is that this David Jones repositioning has led to $72 million of CapEx at Southland, a further $48 million at Burwood, both are only 50% owned by Scentre, so we can halve those in terms of the commitment from Scentre. But there's still big numbers. We then have Bondi Junction, magnificent center. $28 million replacement of the expensive food court on Level 1, which was gutted and replaced with a gym and Rebel.

Look, I understand leisure and entertainment. Clearly, it was overcapitalized. Clearly, it wasn't delivering a good outcome, but pretty sad in a way to see this magnificent food court gutted, pulped, thrown out. I'm not sure whether David Jones was the party who had to write off all the plant and equipment and the very, very expensive fit-out. Whether Scentre contributed to that pulping. But look, it had to be done. I'm not disputing that. The gym and Rebel look good, but it's just another example, Chair, of where money disappears down a big black hole in the Westfield facilities.

What concerned me enormously when reading the annual report and hearing again today from the CEO, we are excited to announce a $240 million redevelopment of Level 6 at Bondi Junction into a world-leading lifestyle, entertainment and dining destination. Look, I've got direct investments in retail and leisure. $240 million is a huge amount of money when the structure is there. That's just for fit-out. That's enormous. It's massively competitive leisure and food and beverage and leisure massively. And hunting $240 million on Level 6 at Bondi Junction is scary, like ground floor leisure and retail, relatively easy to get going. To get the amount of people up to Level 6 to justify $240 million burn, good luck, Elliott. I'm not sure it's going to stack up. But rather than being excited, to me, that's a frightening project that you are taking on.

Look, one thing I think the annual report could be a little bit clearer. For example, Chair, GPT specifically highlight the amount of money that is capitalized on tenants' expenses and fit-outs. It's a little bit harder to find that information for Scentre. But there's a huge issue. I've got a question for the auditor a little bit later as to whether repositioning of facilities like with David Jones, we all know it's really struggling. Is that repositioning CapEx? Or is it just a P&L expense? And I'd be interested to know on those expenditures, the $72 million at Southland, $48 million at Burwood, $28 million at Bondi Junction. And then I hope the $240 million is all regarded as, I don't know, it's going to be expensed or not.

But I'd like to hear clarification as to what is your stance on what you expense through the P&L. If a tenant goes broke and you throw out the fit-out, if it's yours, do you expense that through the P&L? Or are you capitalizing it? Just like to hear what is your practice. So that's really my first issue, that's sort of a question, but do you want me to stop there, Chair or go on my second question?

So -- why don't you keep going and then we'll answer them.

Look, to me, the biggest single issue for Scentre, phenomenal company, as the CEO says, unbelievable land, development possibilities with above the facilities. It's fantastic. We all use it, brilliant company, REIT, but it just doesn't return any capital growth. In fact, it's delivered capital losses over the 10 years. So I just appreciate the guidance from you, Chair or Elliott.

But why do you think the share price is lower today than it was 10 years ago? Are shareholders better off investing in Scentre equity? Or are they better off investing in Australian government bonds? Personally, I invested a significant amount in the $750 million Scentre senior debt issue that was done a week ago at 5.85%. Now that's a better return than Scentre shares have delivered over the last 10 years. Another parameter Chair is, I touched on it last year, but I've personally invested significant dollars in the 2 South Australian Westfield trusts that hold Tea Tree and West Lakes. They were marketed with a targeted TSR, total shareholder return of 15%. I'm not expecting that. It'll probably be 12%, but that's a long, long, long way above what Scentre itself is delivering.

So my second question, Chair, can the Board provide investors with the hope that they will belatedly even for bid, receive some capital growth on these iconic assets. Or is Scentre just a CapEx-heavy entity that continues to chew up huge amounts of free cash flow on CapEx when tenants go broke or when you need to reposition, you have to upgrade food courts and facilities as per Level 6 at Bondi Junction. To me, it's a nice facility. But here we are, $240 million going into it. Or is Scentre, Chair, purely a bond proxy? Does everyone have to recalibrate their thoughts? It's no longer an entity that's going to give you an equity return? Is it just a bond proxy, in which case, probably better off investing in the Scentre debt.

So they are my 2 questions, Chair. I also had a technical one for the auditor later on.

Okay. Thank you. Thank you, Mr. Kingston. So we'll take your comments as noted. First of all, I'll ask Elliott to just respond on the CapEx question.

Yes. I think there's about 15 questions in that. So I'll try and unpack what you've gone through. Maybe we start off with Southland and Burwood. We talk about as being a downsizing of David Jones, but there is a lot more that goes into a downsizing of David Jones is what goes into that space after the downsizing. And in a number of cases where we do have David Jones, they are leases that were entered into, in most cases, actually over 2 decades ago. There's changes in building structure that are required to bring it up to a standard that is effectively leasable in the year 2026 versus the year 2000 or in the case of both Southland and Burwood were 2,000 -- actually, in David Jones and Southland is even older than that. And in the case of Bondi, it was 2004.

And so we are taking the opportunity of effectively taking David Jones space at those 3 centers, and we've done it with Myer as well, which is paying far less rent per square meter than what we're replacing it with. And that is far more productive from a financial point of view for the shareholders. But even more importantly, from a customer standpoint, and I did announce the statistics, we are seeing a major uplift in the visitations that we're seeing at each of those destinations on completion of repurposing in effect space, which wasn't attracting the same customer to the post development where we're seeing more customers come. So if we take the Bondi example, the -- and I think you referred to the food court, that was David Jones' food hall. David Jones paid the entirety of the defit of that. And we've replaced it with customers who actually go to it. And we're seeing that with the new Virgin Wellness Center and the Rebel rCX concept store, both of which attract a lot more customers and rent than what David Jones was paying or attracting when they were taking that space.

What that has allowed going to your question around Level 6 is the opening up of the opportunity of now forging into a path of demand set that Bondi is very under-indexed in, particularly compared to other equivalent destinations around Australia. And so we do see an opportunity to make a very good economic return on the $240 million that we will be investing there in repurposing that entire Level 6 into entertainment, better food and capturing a piece of the market that Bondi hasn't captured. And so we're going from a center which is already at the premium of its portfolio at a time when it's not in decline, but investing in it to continue to see what we are seeing is very good growth coming from that particular asset as we're seeing with both Burwood and Southland.

And if we go back to the years before that, Carindale, which had a downsize of the Myer -- sorry, David Jones or Knox, where we've had the exiting of Myer. And so we're being quite dynamic in terms of putting space on the ground and business partners on the ground that attract customers because the more people that come, the more businesses will come and partner with us. We're seeing that with the leasing statistics and the more rent they'll pay.

Maybe if I can actually just touch on your bond point. Bonds don't grow. So in terms of your 5% return, that's what you're getting every year. I think if you look at the history of the earnings of Scentre Group, particularly over the last 5 years, you've seen returns be far in excess of what the bond has achieved. And that's because we have an inflation hedge naturally built into our lease structure. Ilana said at the start, in her comments, that the share price performance and dividends delivered almost 29% return during the course of the year. So that's far in excess of an alternate investment in bonds.

But the other piece, which I think you need to also bear in mind is our earnings growth, particularly in the last 5 years, has well exceeded both GPT, region and every other one of the comparable investments in our sector. And that's because we're focused on what drives more customers to come and visit us because that drives more demand for space, which drives earnings growth for the business. And we do so in a way which is deploying capital in a very deliberate way in order to continue that demand cycle and growth of earnings cycle that we have been seeing and expect to continue to see.

Just pick you up on a couple of points. I think it's misleading, Elliott, to talk about 29% TSR in the last 12 months. That's technically right. But in my view, it's out of context. That's based on a share price at 31 December of $4.20. The share price yesterday was about $3.58. I try to be fair and balanced. It's a bit like the 5-year stats in the annual report. In my view, they're technically correct, but they're a little bit out of context because they're coming off such a low base in COVID. I try to be fair, which is why I go 10 years. And the simple fact is the share price is significantly lower today than it was 10 years ago. But yes, that TSR for the last 12 months, technically right, but misleading.

I'd just like to be specific. Could you please just clarify, are you expense -- what part of these huge expenses of the repositioning from David Jones as problems? And I take your point, you're going to get more rent from them and et cetera, et cetera. But what part of the $72 million in Southland, $48 million at Burwood, $28 million at Bondi Junction and then heaven forbid, $240 million, Level 6. What part of that are you going to expense compared to capitalize?

So under the accounting standards, it's effectively all expensed because we have property revaluations go through that as a revenue item as well. In terms of how we calculate funds from operations, we do capitalize a significant portion of that because it is a reinvestment in the building. And I'll give you the analogy because when you own a rental property, I'm sure you file your tax return and you do have to delineate between things which are more of a shorter-term use such as shorter-term maintenance versus things which are capital from a tax standpoint. It's very similar to the way that we would be treating the investments that we're making. So to the extent that we are having shorter-term expense style CapEx as part of maintenance that is expensed. To the extent that we're reinvesting for the longer term in structure, that would be capital.

Okay. All right. Look, Chair, I had a technical -- a short technical one for the auditor. Page 135, Note 5 states amortization of tenant allowances in '25 was $64.5 million. What is the total capitalized tenant allowances? And what's the amortization rate?

We invested in operating and leasing CapEx of $160 million during the course of 2025.

You're only amortizing $64.5 million.

For the leasing CapEx, doesn't include the operating CapEx.

But what is the -- in the balance sheet as at 31 December '25, what is the capitalized value of those components?

Yes, $160 million was effectively capitalized into the balance sheet during...

There was no accumulated before that?

Every year, we -- that run rate has been pretty much steady over the last 5 years, post-COVID, yes.

Okay. But I accept $160-odd million last year, but what's the total amount in your balance sheet that reflects capitalized -- those capitalized expenses?

Well, if you take 5 years, it would be 5x $160 million. That run rate is a very consistent run rate.

Less the amortization, I assume.

Well, if you -- the current value -- the valuation -- sorry, the accounting standards require us to current value accounts. So to the extent that we're embedding the capital cost into the investment of the properties, those properties are then externally revalued on an annual basis. The difference in what the value is compared to the previous value plus the capitalized cost will either be a profit to our statutory profit account, a number or will be a loss. And so because of current value accounting, we don't have depreciation in the traditional sense of a historic cost asset base.

Okay. Look, I understand that. Just I'll make a comment. It would help in analyzing it because I accept that you're doing your revaluations each year and you've had a positive revaluation this year, so that's good. But from a strict P&L perspective, most analysts eliminate the fair value adjustments. They treated it in a separate bucket. One year, you go up, you go down, bang, bang, bang.

But it would help to get a little bit more clarity given that you are a huge CapEx sinkhole to understand exactly how much you are spending on all the things you've talked about. When a tenant goes broke, you have to reposition. As you rightly say, when the air conditioning is old, you've got to redo it. You've got to improve the layout, all those things. It just would help if there's a bit more clarity on that because it's a little bit subjective whether you put those through the P&L or whether you effectively put them into an offset against the property valuations each year.

I think the disclosure actually does highlight that. So whether it's through our management presentations, which are loaded on the ASX on the day of announcement, $160 million or whether it's evident in the annual report, it is a very transparent number. But I think you rightly point out that the investment bucket does expense that. And if we have a positive revaluation, in effect, the money that we've put in has been considered to be worth even more as a result of that revaluation, taking into account the investment that's gone into the asset during the course of that year.

Any other questions?

Nothing online and nothing on the phone.

Allan Goldin from the Australian Shareholders' Association and holding proxies for -- from 163 security holders. Absolutely fantastic that you're actually getting some extra value out of that 100% ownership you have in a number of those centers. Selling down of them is wonderful. You're actually sweating assets. Hopefully, it continues as long as the economics make sense because you can go down quite a bit further and still keep your management rights. So it's a much better use of rather than keeping 100% of ownership in the building.

The idea of going and developing that land bank is brilliant. It should have been done years ago. The fact that you're doing it is great. It's going to go and add great value to the whole business and it will increase the economic utilization, as you say, of your centers. I think all that's great. It's very interesting at the beginning, you talked about your increase in visitations over this -- the first quarter. I think it was 5.4%, which is wonderful. I know it's a very short period of time, but can you tell us has that continued over the last 3 weeks?

Yes. Visitations increased by, I think, 3.1% in the first quarter. It's -- we are in a very unusual time frame, not for the geopolitical, which we are obviously very unusual, but the timing of Easter and school holidays in the first 3 weeks of this month is different to the previous year. And so it's hard to draw that conclusion at this point. However, what we are seeing is an acceleration in the number of visitations that have occurred, particularly during the month of March and in the early part of April. And we're also seeing that, as I pointed out in the speech, in terms of business partner sales were particularly strong in the month of March. We don't have April as yet.

Yes. Okay. Obviously, it's going to be something that everyone is watching with the fuel problems and everything and people not traveling as much. I'd like an explanation on something. In the ASX 100, the miners and most industrial companies treat subordinated debt as part of net debt. Yourself and virtually all the listed REITs don't. So your gearing ratio does not include that subordinated debt. Why do REITs treated differently?

You go. You will answer it better than I.

It's treated in the way that the credit rating agencies and more particularly, our bond covenants are calculated. And so our bond covenants, in fact, exclude 100% of the subordinated notes from the covenant calculation. We include the 50% equity credit that the credit rating agencies provide to the subordinated notes.

And my understanding in the accounts are treated as a liability, but in terms of the gearing ratio, it's consistent with either how the bond covenants are calculated or and/or the credit rating agencies calculate it. And my understanding is that for most companies, industrial or REITs, that would be a very consistent approach.

I'm not too sure about that, and I'm not going to get into a discussion about it. But from what I've seen, particularly with the miners, they go and include it in their gearing ratios when they're looking at it and also most of the industrial on the ASX 100. But we'll just leave it. But thank you very much.

Thank you, Mr. Goldin. Are there any other questions from the floor? Okay. So as there are no other questions, I'll now move to items 2 and 3, which are the reelection of Mike Wilkins and the election of Julie Coates. The notes accompanying the Notice of Meeting include a background note on each of Mike and Julie. Mike Wilkins is a director who retires by rotation and offers himself for reelection. The Board, with Mike abstaining, recommends that you vote in favor of his reelection. I now invite Mike to say a few words to the meeting.

Thank you, Ilana, and good morning, ladies and gentlemen. I've been proud to have been a member of your Board since 2020. During that time, Scentre Group has grown and developed and is now playing an even more important role in creating extraordinary places and experiences that connect, enrich and are essential to our communities. Building from this, the company is now seeking to broaden that role, including assisting in further enhancing our communities through its expanded strategy. Scentre Group is a strong organization, which has faced into a number of issues over the past few years whilst also continuing to be successful in terms of its growth and its appeal, both to our retail partners and to the broader community. In that regard, it's driven and defined by its purpose and values.

I believe that my skills and experience gained through nearly 40 years in the broader financial services sector, including over 20 years as CEO of ASX-listed companies, together with my more contemporary experience as a nonexecutive director can continue to assist our company in the pursuit of its strategy and its continuing delivery for our stakeholders. The particular skills that I bring to Scentre Group are in the areas of leadership, strategy, governance and risk management, and I'm keen to continue to make a contribution to our organization. I'm currently a member of the Audit and Finance Committee and the Human Resources Committee as well as being a member of the Board Security Working Group.

External to Scentre Group, I'm currently the Chair of QBE Insurance Group, although I do acknowledge that I will be stepping down from that role on the 8th of May. And I'm also the Chair of Medibank Private Limited. I remain proud to be part of Scentre Group, and I look forward to continuing to assist it as it pursues its strategic agenda. I greatly appreciate your support for my reelection today.

Thank you, Mike. Are there any questions from the floor? Yes, David.

Clearly, Mike is an excellent director, fantastic experience. I think I first met you probably 20 years ago, Mike, briefly, but obviously, a great person. Interestingly, you also were a Director of Maple-Brown Abbott for a while, which is a funds manager. I'm just genuinely interested in your view because it is perplexing as to why such a phenomenal company has delivered over 10 years capital loss on to shareholders. Do you think that's an anomaly? Do you think in the future, Mike, that this company can trust -- can actually deliver capital growth to security holders? Or is it forever going to be just a dividend distribution entity?

Thanks, Mr. Kingston. You're right. It's well over 20 years, I think, since we've met each other. Look, I think that there are a number of factors that go into all of this. Elliott has enunciated a number of those issues. I think all we can do is try to pursue the strategy that the organization is currently after. We believe that is the right strategy and will deliver long term for our stakeholders. But as you rightly pointed out during your earlier questioning, there are a number of external factors, including the interest rate environment that does have an impact on Scentre's Performance and hence, on its security price as well.

Thanks, Mike. We do have -- sorry, Ms. Lee.

I actually think I forgot to introduce myself earlier, but -- Natasha Lee, security holder. Look, for both Mike, and I'll also include Julie at this stage rather than kind of repeating myself. Look, I think that you both have excellent skills and I believe will be an asset to the Board. Although I note on the skills matrix of the Board that social infrastructure is sort of one of your weaker measures. And it does concern me a bit that given the environment that we're looking at kind of connectivity to the community and the like that the Board probably should look more at the diversity of the members and particularly the life experiences bought in the decision-making, which might enhance the social infrastructure measure. Do you have any comments?

So thank you for that comment. So in the social -- the meaning, I think, of social infrastructure in that skills matrix relates more to our strategic landholdings, creating places and increasing economic activity around those strategic landholdings, which is the sort of expertise we are looking for in additional directors on the Board. But I take your point about social cohesion, which is very important to us and also the need for diversity on the Board. I think it's a point well made.

And we have a question online?

Yes, Chair, there's a question from Stephen Mayne. Mike Wilkins has spent the last 30 years being either CEO or Chair of 6 different ASX-listed insurance companies, Tower, Promina, IAG, Medibank, QBE and AMP. Why is the insurance specialist sitting on the Scentre Board? Is he intending to service a full 3-year term? And has he ever sat on any other boards where he wasn't the Chair or CEO at some point? How does he cope with Scentre Board meetings not being in charge of proceedings?

Thanks for the question, Mr. Mayne. I think it sets out very well what an outstanding resume Mike has. So Mike is definitely an insurance specialist, but he is so much more. As you heard, he is a highly experienced, skilled CEO and Chair with broad skills with particular emphasis on financial services in Australia and Asia. As Mike pointed out, he brings much, very general, frankly, skills and attributes of leadership, strategic thinking, governance, risk management, and we're very fortunate to have him on the Board. I'm hopeful that he will serve the 3-year term, and he seems to cope very well with not being Chair of Board meetings.

I'd like to disclose the proxy results for this resolution. They appear behind me. There seems to be no further questions. Based on the proxy results, item 2 has passed by the requisite majority. Congratulations, Mike.

Thank you.

Julie joined the Board in October last year and offers herself for election. The Board, with Julie abstaining, recommends that you vote in favor of her election. I now invite Julie to say a few words to the meeting.

Thank you, Chair, and good morning, everyone else. As Ilana has said, I joined the Scentre Group Board in October. And today, I'm very pleased to seek your support for my election to the Board of your company. My career spans a broad range of businesses in retailing, manufacturing, supply chain, building materials and consumer goods. My last executive role was as Managing Director and Chief Executive Officer of CSR Limited, and I was very fortunate to lead that business for 5 years, delivering value for all stakeholders over that period of time, but in particular, for shareholders.

Prior to CSR, I was the Managing Director of Goodman Fielder in both Australia and New Zealand, and I was also on the Board of Coca-Cola Amatil at that time. Earlier on, I held senior executive positions at the Woolworths Group, including roles as the Managing Director of Big W, the Chief Logistics Officer and the Human Resources Director for the Woolworths Group. My retail career also included senior roles at Officeworks, Target Australia and David Jones. I'm currently on the Board of Wesfarmers.

In essence, my career spans roles running businesses and leading large teams to deliver growth through major transformational change for the benefit of customers, team members, communities and shareholders. Since joining the Board in October, I've visited several of our Westfield destinations, and I'm very excited about the opportunity to work with the Board and with management for the continued success of the group and for you, our security holders. Finally, I commit to bring all that I've learned to date in my career to my role on the Scentre Group Board to support our purpose, creating extraordinary places and experiences that connect, enrich and are essential to our communities. It would be a privilege to be elected today. So thank you for your consideration.

Thank you. Thank you, Julie. Before moving to discussion, I'll disclose the proxy results for this resolution. They appear on the screen behind me. If anyone wishes to ask a question in relation to Julie's election, could you please do so now?

No questions online. Thank you. So there are no further questions. Based on the proxy results, item 3 has passed by the requisite majority. Congratulations, Julie.

I'll now move to item 4, the adoption of the remuneration report. Before moving to the discussion on the report, I'll disclose the proxy results for this resolution. They appear on the slide behind me. I'll be happy to answer any questions that you might have. Are there any questions in the room? There is a question online.

Yes. A question from Stephen Mayne, Chair. Thank you for offering shareholders a hybrid AGM this year. And will you commit to keep doing this in future years to maximize shareholder participation? Thanks also for following the agenda, something Mike Wilkins didn't do as QBE Chair, instead calling for questions on all items of business as one job lot. Also, when disclosing the outcome of voting on all resolutions today, including this important remuneration report item, could you please advise the ASX how many shareholders voted for and against each item, similar to what happens with the scheme of arrangement?

I don't understand why you keep rejecting this request when the likes of Stockland, ARB Group, Qantas, ASX, Metcash, Tabcorp, Suncorp, Myer and even our own share registry provider, Computershare, have all got with the program and embraced this practice in recent years. You've got the data, so why not let the sun shine in?

Thanks for the comment, Mr. Mayne. I'm not sure when you look at these results, what actual additional information that would provide, but we'll certainly take it on notice and have a look at whether we can provide that additional information. Thank you. No further questions. Sorry, Mr. Kingston.

Just a quick one. Look, I come from investment banking background, so I'm delighted to see people remunerated for good performance, and this is nearly a $20 billion company, but including debt, you're allocating -- you've got $35 billion of capital. So I'm supportive of incentivization. Just interested in a little bit of clarification, Chair. Page 165 of the annual report mentions that fair value of all performance rights granted is $36.8 million. Could you just give us a little bit of clarification on to what the Board's thinking is about the extent of that? It's almost getting up to tech company level when you $36.8 million in total.

So are you talking about the quantum of the performance rights, sorry?

They are the ones granted on ASX at the moment.

So the -- we have long-standing employees, which we think is of significant benefit to security holders. And as a result of that, there are a significant amount of rights on issue. Obviously, that means that the executives' interests are absolutely aligned with security holders' interests. And so I think that is a benefit to all of us. They definitely have skin in the game. There seems to be no further questions. So based on the proxy results, the item has been passed by the requisite majority.

I now move to item 5, the approval of the grant of performance rights to Elliott Rusanow, our CEO. The Board with Elliott abstaining, recommends you vote in favor of this resolution. Before moving to discussion, I would like to disclose the proxy results for this resolution. The results appear on the screen. If anyone wishes to ask a question in relation to this resolution, please do so now. Mr. Goldin?

Look, I think your remuneration report is much better. I think the way the incentives are structured for the CEO is much better. It's fantastic. In the last few years, you've actually included TSR after fighting it for a long time. I still question the fact that your comparative group is very small. And you're doing a small comparative group because you're saying, well, those are the companies that we compete with every day.

Yet in your STI, in your CEO's address, particularly what you're talking about is moving away from what you did traditionally. You're looking at going and becoming much more a developer either directly or subcontracting or doing joint ventures, but moving into a different field, which makes you much more like some of the other REITs. So I think that you should be looking at the idea of expanding that comparator group to all of the listed risks or at least the top 20. That's a comment, not a question.

I think it's a good point. So thank you for making it. Yes. I think as business changes, you definitely have to consider the comparator group that you use for long-term incentives. I agree. Thank you. Mr. Kingston?

Look, I don't have a problem with the remuneration and the incentivization to Elliott. He deserves it. At the end of the day, fixed remuneration of $2 million, short-term incentive of 130% of base, that's the maximum. Long-term incentive, 175% of base. If he gets it all, it adds up to $8 million, and that would be good because as you say, Chair, there's alignment. I do have a problem with the formula, though, and I'll take you through that. I think it's misleading.

The Notice of Meeting says 2025 ROCE. I'm purely going to talk about the ROCE part, Chair, which is 70% of the weighting. The relative TSR is 30%. My only comment is on ROCE, which is the major part. Notice of Meeting says that 2025 ROCE was 10.24%. You read that and you think what a brilliant company, property company with an ROCE of over 10%, that's phenomenal. I don't know any others that can do that. But you then go into the detail. The definition of ROCE as per the Notice of Meeting is operating profit divided by average contributed equity and retained profits. Cutting to the chase, operating profit is $1.185 billion. Shareholders' funds, round numbers are $19 billion. So in conventional terms, that's an ROCE of around about 6.3%, million miles from over 10%.

Thank you for letting Andrew clarify a couple of things with me this morning before the meeting. But I think the flaw in this formula, in my view, it's a flaw and it's misleading. As I understand it, and correct me, Andrew, if I've interpreted it incorrectly, the denominator that you are -- the operating profit is clear, Chair, $1.185 billion. But the denominator is confused. And in my view, it should be shareholders' funds. But I think, Andrew, you've indicated that it's not shareholder funds. You've got to excise from that the amount of the revaluation of the properties over the years. And that's how even though the operating profit is $1.185 billion. The only way you can get to over 10% ROCE is to divide by around about $11 billion, whereas the unambiguous balance sheet in the annual report is around about $19 billion.

Now there are several definitions of ROCE, Chair. Some companies look at it as the denominator being shareholders' funds plus debt because that's the amount of capital you're playing with, which is $35 billion. But I accept you're not doing it that way. I accept that. And that's fine. But I just don't think you are in the true sense of the word, delivering anything like 10.24% ROCE. But that's my concern. I appreciate if you could clarify.

Thank you. Thank you for the comment. I think the difference, and I'll have to help -- get some help here, but the difference is between what we call contributed equity and shareholders' funds.

Correct.

And so the difference is...

Yes. So -- and it's actually stated in the accounts under Note 18. There is a clear definition of what contributed equity is. What it doesn't include is the cumulative total of undistributed earnings that have been built up over time. And in effect, what the program, I'll exclude myself from that, but in totality of the long-term incentive is to align the contribution that management can make on the funds in dollar terms that have actually been contributed by shareholders over all its history of Scentre Group.

So excluding movements of fair value that are not realized, but rather the dollars that have been physically contributed in the form of either issuance of stock by the company over its history and accumulating to that the amount of earnings that have been from an operating profit standpoint earned over that time that have not been distributed to security holders. So in effect, the amount of dollars that shareholders have been asked to retain in the company. And if you look at Note 18, you'll find a number of $10 billion or just over $10 billion. That doesn't include the accumulation of retained earnings.

So to that $10 billion, we do add the retained earnings that haven't been distributed to security holders, and you get to a number of circa $11 billion. And that's why we purposely call it return on contributed equity as opposed to return on equity or return on shareholders' funds as defined by the accounting standards. Because as we said before, our accounts are fair valued accounts, which will be dynamic in terms of what that shareholder fund number is from a net equity standpoint. But what doesn't change or what will change only with deliberate actions of seeking more dollars or retaining more dollars is the amount of contributed equity that shareholders have provided.

Thanks for that clarification. Look, I'm not suggesting that the calculation is incorrect. Clearly, in the fine print, it's spelled out, but I don't think many people are going to be able to read the fine print to that extent. But in a conventional sense, Chair, return on capital employed. Elliott is doing a good job. He's either got $19 billion of capital, which is shareholders' funds. It doesn't really matter, Elliott, where it comes from. That's the amount that you are tasked with gainfully utilizing to deliver good returns.

Some other people would say that you've got $34 billion because they would include the debt capital as well. But I'm not suggesting that there's anything probably wrong here. It's in the fine print, but Chair, it's just misleading. Clearly, the return -- the capital employed that the management have got to use is either $19 billion, which is the shareholders' funds in your own balance sheet or you add the debt and it's $34 billion. I just think you should reset that formula.

I think we would reject that it's misleading, but I hear your comments.

Look, it's not misleading in a legal technical sense because it's in the fine print. At the pub test level, in my view, Chair, it is misleading because it's tortuous to move from shareholders' funds in the official document of the company, which is clearly nearly $19 billion to get down to $11 million, which is why -- this very important issue, which I welcome Elliott receiving the incentive, but a very important issue. The first thing I do is how the hell can anyone deliver over 10% in a property company? It just doesn't happen. But it only happens because you're dropping the denominator from $19 billion down to $11 billion.

The only other comment I'd make is the thing that's important to you is the growth, and you've had growth.

Well, again, that growth, again, the Notice of Meeting says that last year, it was 10.3%. If Elliott gets it up to 10.7% or thereabouts, then he gets the full allocation. That's pretty minor growth in my view. It comes out at 3% or 4% per annum. So I don't think the growth is all that good. And a lot of that growth doesn't translate into shareholder value growth. Anyway, thank you.

We have a question online?

Yes, Chair, Mr. Stephen Mayne. Could the CEO summarize his past LTI grants as to whether they have vested or lapsed and whether he has ever sold any ordinary shares in the company. Please don't say look it up in the annual report and through ASX announcements as you did 2 years ago. It's complicated and the CEO could factually summarize the situation in 60 seconds. Dozens of other CEOs have happily done this, so please invite Elliott to do likewise.

Thank you, Mr. Mayne. I'm not going to invite Elliott to do that. Actually, it's very clearly set out on Pages 86 and 87 in the rem report, and I think you could read that much more quickly than 60 seconds. So I don't intend to do that. So thank you, Mr. Mayne.

Are there any further questions? Okay. So there's another question. So I think there is an additional question.

I'll just check. Yes. Sorry. It was a general question from Stephen Mayne, Chair. Our former long-serving CEO, Peter Allen, went to the other side of the landlord-tenant table last year when he was appointed Chair of Coles Group. Do any of our personnel deal directly with Peter on leasing or any other matters? Or as Chair of Coles, does he remain above the fray? Where does Coles Group rank in terms of our largest tenants? Are they bigger than Woolworths, Myer and Wesfarmers? Who is our biggest tenant? And do any of our major chairs get involved -- sorry, major tenant chairs get involved in leasing discussions.

Thank you. So John Papagiannis is very pleased. I don't get involved in tenancy discussions. So I can only assume that Peter doesn't either. Would you like to talk about Coles and where they rank?

Yes. So Coles are one of our largest tenants. They do rank amongst that cohort that you've said there, Stephen, Woolworths, Myer, more so than Wesfarmers. What's also on that list is obviously David Jones. So they are a large business partner for the group. But in our dealings, we do not deal with Peter Allen as Chair of Coles. Rather, we deal with management of Coles as we would deal with management in every one of those other business partner discussions.

Okay. Thank you. I believe there are no further questions. So -- sorry, have we done the proxies on item 5? No. Based on the proxy results, item 5 has been passed by the requisite majority. So please cast any final votes before I close the polls for items 2 to 5, which I'll do shortly. If you've voted in person using a card, please raise your hand so that it can be collected from you.

[Voting]

The polls for the resolutions for items 2 to 5 are now closed. The final results of the polls will be announced to the ASX later today. That concludes the formalities of today. On behalf of the Board, I want to thank you for participating in today's AGM. The meeting is now closed. For those of you with us in person, I invite you on behalf of the Board to join us for some light refreshments outside. Thank you all very much for coming. Thank you.

[Audio Gap] full year results update. [Operator Instructions]. There will be a presentation followed by a question-and-answer session. Please note that this conference is being recorded today, Tuesday, the 24th of February 2026 at 9 a.m. Australian Eastern Daylight Time. I would now like to hand the conference over to Mr. Elliott Resona. Please go ahead.

Thank you, and good morning, everyone. Welcome to Sender Group's 2025 Full Year Results Briefing. I'd like to begin by acknowledging the traditional custodians of the land I am on this morning and pay my respects to their elders, past and present. I'm joined on the call today by our Chief Financial Officer, Andrew Clark, our Chief Operating Officer, Lillian Fadel; and John Papagianas, Group Director of businesses. At the end of 2025, we made some changes to establish a structure to effectively pursue our growth ambitions. Lilian was appointed Chief Operating Officer with our accountability is expanded from customer community and destinations to also now include asset management, development, design and construction as well as data and analytics. Andrew's role and responsibilities were expanded to include leadership of our strategy to broaden the economic activities and usages across the group's substantial and unique land holdings as well as the development of Center Group's long-term strategic plan. .

Our strategy is to grow the economic activity that occurred at each of our 42 Westfield destinations located throughout Australia and New Zealand. This strategy continues to deliver strong operating performance with continued growth in earnings. Our focus is to attract more people to our destinations and give them reasons to stay longer when they are with us.

By doing this, we continue to improve our ability to attract a broader range of businesses to partner with us at our Westhill destinations. Our strategy is also focused on how we better utilize our substantial and unique land holdings at our destinations to create additional long-term growth for the group. Our results in 2025 represent now our fifth consecutive year of earnings and distribution growth in absolute dollars and in per security terms.

And we expect these to continue to grow in the years ahead. For the year, our earnings as measured by funds from operations increased by 4.9% to $1.18 billion. On a per security basis, funds from operations was [ $0.2282 ] per security and was ahead of guidance. I would like to thank and recognize our team for their continued focus on bringing our strategy to life each and every day and delivering these results. especially during a period where many of our team have been contributing to the careful and extensive work of the New South Wales state corona as part of their inquest into the tragedy that occurred at Bondi Junction in April of 2024. In 2025, we welcomed 540 million customer visits, an increase of 14 million compared to 2024. This is the highest visitation we have seen since 2019.

In the first part of 2026 up until last Sunday, customer visitation was 79 million, an increase of 3.1% compared to the same period in 2025. Our 42 Westell destinations are already the most premium and highest quality portfolio in both countries. Our portfolio is irreplaceable. They are located in close proximity to 21 million people. Our destinations welcome on average, over 10 million visitors each and every week.

A key driver for why people choose to spend their time at a Westfield destination is the approach we take to activations and events at our destinations. In essence, we worked tirelessly to give people the reason to come and to stay longer when they do. During 2025, we held over 21,000 cultural and community events. A key component of this strategy is the partnerships we have with some of the world's leading consumer experience brands.

Our strategic and very successful partnership with the Walt Disney Company now in its fourth year, continues to deliver popular events that appeal to multiple generations of our customer -- for our customers and drive even more visitations to our destinations. We are pleased to also partner with Sony Music to bring artists to Westfield for free live performances. We're continuing to build on the unique and compelling experiences we offer customers through our partnership with Live Nation. We have seen strong and ongoing customer appetite for music-led experiences, which extend the excitement and ability to purchase merchandise from major tours beyond the stadium.

We also celebrate premier sporting events through activations in our destinations. So far in 2026, we have hosted Life side for the Australian Open tennis through Charlie Summer of Tennis and events for the 2026 Milano Cortina Winter Olympics. This followed the successful -- the success of our activations for the Paris Olympics in 2024. Again, giving people a reason to come and stay with us.

And later this year, we have exciting plans to host similar fan activation sites for major sporting events, again, giving fans from all cultural backgrounds, the opportunity to enjoy premier events in world sporting events, amongst other fans and at the same time, do so at our destinations. We continue to strengthen engagement with our Westfield members and are pleased to see our membership grow by 11% to $5 million during 2025.

Our targeted member-led strategies translates to increased frequency of visitation and dwell time. Our data shows Westell members visit our centers significantly more often spending more compared to nonmembers. Why our giving people -- why giving people a reason to spend their time with us is so important is because it provides the opportunity for other businesses and brands, the opportunity themselves to interact, engage and transact with our customers in the most efficient and productive way.

For a business that interact with consumers, our Westell platform is the place where these businesses want to be. In 2025, our business partners achieved sales of $30 billion a record for the group. This is $1 billion more or 3.6% higher than in 2024 with the second half of 2025 growing by 4.5%. In fact, the volume of sales, our business partners generate today is $5 billion more than in 2019, pre pandemic, highlighting the importance our physical destinations play in the lives of the customers we serve.

And for the month of January of 2026, Business Partner sales grew by 5.4% on the same comparable period in 2024. As a result of the execution of our strategy, we are seeing continued strong demand by businesses for space in our destinations. With space becoming more scarce, we are focused on identifying and curating the most in-demand and relevant mix of brands, products and experiences to meet the dynamic needs of customers.

In 2025, occupancy increased to 99.8%, representing our highest level of occupancy since 2013. During 2025, we completed 3,090 leasing deals with specialty rents increasing by 4.5%. For the year, new lease spreads were a positive 3.2%, and this spread increased to positive 3.5% in the second half of the year. Average specialty leases have a term of 6.8 years and 80% of our leases have annual escalations that are inflation-linked.

Portfolio-wide, 45% of consumption occurs on site via experiences, making our destination extremely productive and profitable for the businesses that partner with us. We remain focused on pursuing more experiential and lifestyle focused businesses to continue to drive customer interest, engagement, dwell time and ultimately, sales. The group continues to repurpose existing space to enhance the customer experience and productivity of our destinations. During the year, the group completed the expansion of Westfield Sydney, featuring a 2-level Chanel Britique, Moncler and Amiga.

On behalf of Cbus Property, the group has completed construction of the adjoining commercial space and expects to complete the residential component of that same project in the first half of 2026. We have taken the opportunity to strategically downsize a further 3 David Jones stores unlocking space that we can then redeploy to more productive brands that consumers want.

We completed the $72 million redevelopment at Westfield Southland in Melbourne, and the $48 million redevelopment of Wet field Burger in Sydney, with visitation up 6.5% and 9.3%, respectively, in 2025.

We also completed the $28 million redevelopment of Level 1 at Westell Bondi in Sydney, repurposing existing space into health, wellness and fitness. This contributed to destination visitation growth of 8.5% in 2025. Today, we are excited to announce the commencement of a $240 million investment at Westfield Bondi to redevelop Level 6 into a world-leading lifestyle, entertainment and dining destination. This continues our ongoing reinvestment into our destinations to ensure they remain not only the places where people choose to spend their time, but also having a great experience when they do so. Thereby increasing their propensity to spend even more time with us.

Importantly, we are able to undertake these investments continually enhance our Australia and New Zealand's most premium portfolio and experiences, and at the same time, continue to grow earnings and distributions for our security holders. The group is 1 of the largest landholders in the most densely populated areas across metropolitan centers in Australia and New Zealand. Our West will destinations are located on more than 670 hectares of land, close to major transport hubs and where millions of people live and work.

Our destinations have the opportunity to play a far bigger role than retail. We are focused on generating greater economic activity in and around our destinations through the better use of our strategically located land from a multitude of potential usages, residential, student accommodation, health and education, just to highlight some of these potential usages.

During the year, the group lodge planning proposals have a further 6 Westfield destinations. Carindale, Mt Gravatt, Maringa, Woden, NOx and Southland with the potential to deliver more than 16,000 dwellings. I will now hand over to Andrew to present the financials.

Thanks, Sally, and good morning, everyone. Net operating income for the period was $2.1 billion, reflecting a strong 3.7% increase over 2024 and demonstrating our ongoing growth momentum. On a like-for-like basis, net operating income grew by 4.8%. This figure excludes the partial divestment of Westfield Tom side and the release of the expected credit charge in both 2024 and 2025.

Management fee income grew by 6.3% for the period, driven by growth in property revenue and additional fees following the joint venturing of Westfield Chermside. Overheads rose by 2.5%.

Net interest expense has increased by 0.6% reflecting the part period benefit of the various capital management initiatives that we executed during 2025. The increase in tax from $39 million to $44 million is primarily due to our higher management fee income growth in ancillary income and the impact of higher tax on New Zealand income due to lower interest rates. Project income for 2025 is approximately $2 million.

As previously discussed at the group's half year results, this has been impacted by the higher-than-expected construction costs on the commercial and residential project on behalf of Cbus Property at 121 Casa Resty. Overall, funds from operations for the 12-month period was $1.18 billion, which grew by 4.9% compared to the prior corresponding period. Operating and leasing capital was $167 million for the year.

The group has made significant progress in its capital management funding and interest rate strategy. During 2025, the group successfully refinanced $2.4 billion of senior notes and subordinated notes, significantly improving the group's weighted average credit margin. In March, the group completed the make-whole redemption of all the remaining non-call 2026 subordinated notes totaling $1 billion which had a margin of 4.7%.

This was funded through a combination of a new issue of $650 million of subordinated noncore 2031 notes at a margin of 2% and $350 million of bank doing. In September, the group issued $1 billion of 10-year senior notes in the Australian domestic market at a margin of 1.38%. In October, the group issued EUR 500 million or approximately $900 million of 8-year senior notes at a margin of 1.295%, marking a return to the European market.

During 2025, the group has executed $3.2 billion of interest rate swaps, increasing hedge coverage to 99% as of January 2026, with an average base rate of 2.98% and 82% at December [ 2026 ] at an average rate of 3.01%. Our distribution reinvestment plan continues to be in effect for the February 2026 distribution. The DRP will continue to add to the group's various sources of capital.

These capital management initiatives have enabled the group to achieve a weighted average interest rate of 5.6% for the year. Included in this was an average base interest rate of 3.1% and an average margin of 2.5%. This is a significant improvement in the average margin when compared to 2.8% in 2024. At 31 December 2025, the group had $5.2 billion of available liquidity. Following the successful joint venturing of Westfield Chermside and Westfield Sydney during 2025, raising $2.2 billion of funding, the group has today announced its intention to utilize some of this capital to redeem the USD 750 million or approximately $1.15 billion of 2030 senior bonds, which have a credit margin of 4.2%.

In addition, the group has announced its intention to increase its investment in carried our Property Trust, with any acquisition of units subject to the prevailing market conditions and governed by the creep provisions of the Corporations Act.

These transactions are in line with our capital management investment strategy to deliver long-term growth to our security holders. The statutory result was a profit of $1.78 billion, which includes an unrealized property revaluation increase of $456 million. All properties were revalued during the year.

Overall, property valuations increased by 2.5% during the 12-month period, primarily driven by growth in net operating income. The weighted average capitalization rate for the portfolio remains at 5.43% at December 2025. Thank you, and I will now pass you back to Elliot for closing remarks.

Thank you, Andrew. Our strategy to grow the economic activity at our Westell destinations by attracting more people to our destinations, broadening the businesses that partner with us and better utilizing our substantial land holdings is expected to continue to deliver long-term growth in earnings and distributions. Subject to no material changing conditions, the group's FFO is targeted to grow by at least 4% to more than $0.2373 per security for 2026.

Distributions are expected to grow by 4% in 2026 to [ $0.183 ] per security. Thank you, and I will now open the call for questions.

[Operator Instructions]. Your first question comes from Howard Penney at Citi.

Congrats on the results. Just a first question about the subordinated note buybacks. I know you've done a lot of them and refinanced to cheaper versions of the subordinated notes. But could you just give us a little bit of an explanation of what subordinated notes would be potentially something you would consider buying if market conditions were more favorable.

Yes. Howard, it's Andrew here. Look, I think what we've demonstrated over the last number of years is our strong intention to find opportunities to use the tailwind of refinancing both the subordinated notes and senior notes to provide growth to the group.

And we've been very active in terms of doing that. We don't want to be telegraphing transactions in advance of executing on those transactions. But I think if you look at the past and the history and the proactive nature as to how we've gone about that, I think it's fair to say that we have a strategy over the coming years to continue to execute upon their opportunity.

The fact that we raised $2.2 billion of funding through the joint venture in Whistler Chemie in Western Sydney last year, really creates a very strong balance sheet and credit metrics for the group and provides capacity to look at other opportunities in the space. Today, we've announced the make whole of our 2030 senior bonds, $1.15 billion worth so yes, I think it's -- you can see by our actions over the last number of years, and what I'm saying now, we have a strong intention to continue to execute upon that tailwind for the group.

And just a second question. Congratulations on your new role. And part of that is unlocking the value of the land. Could you please give us just any updates on the residential opportunities that you see playing out in the portfolio? .

Look, I'll start, Howard, and I'm sure Elliott will have some comments as well. I think the first part is that -- the opportunity is really significant. And we've got 670 hectares of land, high-quality land located in transportation nodes where people live and work. So we're really excited by that opportunity.

The first part that we're focusing on at the moment has been around seeking planning permissibility changes and rezoning. We've had significant success in the lodgement of those planning permissibility. -- changes. We've spoken about 16,100 potential dwellings that could be added to the sites where we've submitted those planning premise lodgements to date, but that opportunity is significantly more than that.

I think the other part is that -- and Elliott highlighted, this is not just about residential. This is about the master planning of the land holdings that we have and how do we maximize the economic activity that's happening on those landholdings over the long term and thinking about densifying that land with much broader usages.

And the other part that's really important is we see this as an opportunity not only to create additional land on the landholdings, but also how does this create this ecosystem that further drives better economic activity within the Westfield destinations as well. So we're really excited by it. We've had significant progress in terms of the planning process that we spoke about. We're also making a lot of progress in terms of our strategy at a group perspective, but also the strategy that we're looking at on an individual asset-by-asset basis.

Yes. And maybe just today and Andrew's answer that probably the way I would answer it as well. So there's not much more to add. The part that and we purposely use the language of economic activity because it seems that when we talk about densification on talk about densification, people jump to residential. And the reality is that our centers are located at the hub of economic activity, of which residential could be part of, but so for many other usages. And so we're looking at how do we bring those economic usages into our land holding, which surrounds and is adjacent to our destinations. So whereas today, we have destinations surrounded by car park to have destinations that are not only surveilled by car park, but other economic usages, which could include -- which will include residential, but could also include other usages as well given their unique location and where they are. So the point being that -- we all recognize that residential or particularly built to rent is a nascent industry in this country and in New Zealand. And the opportunity of focusing on economic activity in a more broader sense, I believe, can actually bring for the unlocking of those opportunities far quicker than relying purely on a build-to-rent market maturing to a state which becomes economical across the portfolio. .

That makes a lot of sense.

Your next question comes from Tom Bodor with Jordan.

And Andrew. I was just interested in the plan for the CapEx, EUR 240 million at Westfield Bundle. How should we be thinking about returns on that spend?

Yes. So where we should be thinking about it and I think you should be thinking about this for all developments when it comes to retail, not just us, but all our peers. And that is that when often, people talk about a stabilized yield of 6% or somewhere in that vicinity. They only have a focus on the new incremental spend and the return you generate on that new mental spend. And for some reason, conveniently to get about the impact on the remainder of the existing center. And we look at it as -- the total net operating income that we can generate from the entire site, not just the incremental CapEx that we spend.

And so yes, we're targeting a very strong addition and neither addition for Bondi in order to forge into growth, again, use of economic activity is a in this instance being longer trading hours, entertainment lifestyle wellness, food and beverage, obviously, is a big component of that. But the ultimate aim of that is to ensure that Bondi continues to generate superior long-term NOI growth year after year after year because it is the premium asset in Sydney.

Arguably, the next 1 would be the Sydney CBD. So as a suburban center, there is absolutely no question that Westell Bondi is the best asset from a suburban point of view. And the development on Level 6 will further enhance that particularly its location in that demographic area. And the point out of that, and I think the proof point out of that is to see what you've witnessed at Karanda, whereby the downsizing of David Jones and the repositioning of that has seen very, very strong compound annual growth of net operating income post that redevelopment, which was a downsizing of a David Jones, but we've been adding on more and more food and entertainment to that.

Obviously, it's a very easy case study to look at because it's a public company as a case study of 1. But that notion of what return you're getting over a longer period of time is far more relevant than me telling you, you should be expecting to get a stabilized 6% yield at some time in the future, which somehow seems to get knocked out year after year after year.

And there is no -- there is a reason why when you go back in history, we are able to generate significant growth in FFO per security I think if you go back to 2022, when we did change leadership roles, our compound growth is in excess of 6% per annum versus our closest competitor, who is spending a lot of money doing very large developments who is actually generating less than 0 growth and is forecast to continue to be generating very low growth in earnings per security.

And the reason for that is because we are focused on how we spend our capital to enhance the total growth and income that's generated from the asset so it remains relevant to the customer. So customers come more often. They spend longer with us, and that makes it more attractive for businesses to come. It's a very different strategy that we are undertaking, and it's a strategy that is designed to ensure that we're able to refresh forging to new territories in terms of where we are taking our business away from traditional in Verticom retail into other areas, which is businesses to consumer and at the same time, continue to grow in a far superior way our earnings and our distributions to security holders.

Great we were to sort of think about that maybe then in terms of numbers, is it fair to say on that spend in a holistic sense double-digit IRRs unlevered, -- is that the way you sort of...

Absolutely. So we would be expecting to deliver an IRR out of that total investment in Bondi. So if you want to take Bonitoday. What's going to look like Parein the next 5 to 10 years, we should be expecting very healthy double-digit IRRs coming out of that asset. .

Okay. Right. And then -- maybe just another 1 on capital. Obviously, there's some moving around of refinancing senior debt, redeeming hybrids and other initiatives ongoing. How should we think about the balance between really optimizing the debt stack and also preserving financial flexibility and liquidity to execute on these growth plans. Like how do you sort of weigh that balance there?

Yes. Tom, Andrew here. Look, we -- the way we look at it that firstly, every year, we would invest in the operating and leasing capital of the portfolio. That's a fundamental part of the business to make sure that we're maintaining the assets and all the equipment that we have within the centers plus the leasing of new merchant sites where we do provide -- occasionally provide capital.

The other part is that we expect to invest around the sort of $250 million, sometimes up to $300 million in redevelopment opportunities. And so that sort of capital investment, we expect to happen year upon year-on-year, and that's how we look to not only maintain the strong performance of our portfolio, but also provide the underlying growth that Elliot just articulated.

The second part to your question in terms of capital management initiatives, we look to find ways to self-fund those capital management initiatives through the initiatives that we execute in themselves or other opportunities. So for example, last year, we've raised $2.2 billion from the Westwood cum side in Westward Sydney, joint venturing we're looking to use some of that capital to refinance and make whole the 20, 30 senior notes that we spoke about. And we'll look at other opportunities as well as how do we then maximize the return on that capital as it comes in. So they sort of looked at separately.

Great. And can you just confirm what leasing and maintenance CapEx was this year, please, to...

It was $167 million for 2025 and for 2026, we expect it to be around the $170 million mark.

Your next question comes from Andrew J.

[indiscernible] for my questions. So happy to pass it on to the next analyst.

Thanks, Andrew. .

Your next question comes from Adam Calvey with Bank of America.

Can you just talk through the makeup of guidance for 2026, if you're expecting any new JVs and divest ads and just like-for-like numbers in the BSAs that were expected.

Adam, Andrew here. Look, the underlying portfolio, as Elliott up situated is performing extremely well. We expect to see that that level of growth continue in 2026. We're seeing strong visitation growth in early January and partway through February, sales growth has continued as well.

So we expect that momentum in terms of growth from the underlying portfolio to continue, we'd expect around circa 4% growth in NOI. We also have the benefit of the make whole transactions and netting off against the joint venturing that we did last year. So that's a positive tailwind for the business. We do have -- the ECC was an amount and I think circa $17.7 million in 2025.

We don't expect that number to repeat in 2026. And those are probably the key parts. We have, obviously, developments that these smaller developments where we're repurposing space and bringing to more productive brands and retailers -- we don't expect that to -- we have some of those projects completing, but we also have some new projects commencing. So we spoke about Level 6 at Whistle Bondi as an example. So those are probably the key moving parts at a macro level.

Okay. Great. That's pretty clear. And then just on the 4,000 dolling approvals that you have, I mean, what stage you have in conversations with capital partners? Is that -- you've gone out to capital partners? How do we think about time lines actually some to the ground. .

Yes, I think the way that we're looking at it at this stage is, first, -- the first part is we're looking to maximize the opportunity. And by going down the path of focusing on the rezoning focus and potential development approvals really maximizes the scale of the opportunity across the entire portfolio. It's fair to say that we've had a lot of inbound inquiries from potential capital partners that are very excited and interested in opportunities to partner with us.

However, what we need to focus on first is maximize the opportunity while there's this window to work with the state governments and councils on these scale opportunity. And then the second part is we'll then start to look at, okay, well, how do we want to monetize that opportunity over the longer term.

At the very least, the first phase is as you get rezoning and you get scale the land value of the land that we're sitting on can increase quite significantly. So -- that's an opportunity that we're looking at in the South. The second part, which I think is where you're getting at is how do you then want to monetize not just the land value, but the overall opportunity. We're still working through that strategically.

We want to make sure that we maximize the opportunity for the long term, not just try and realize a short-term benefit to the group.

That makes sense. Maybe just a follow-up to that like -- what -- when you talk about maximizing the opportunity, how much more, I guess, zoning or upside to FSR and internal floor space can get? .

Well, we've spoken about the number of units or dwellings that potentially can be built on Horns leader. I think it's in excess of 2,000 potential dwellings across -- if you were to extrapolate that across our 42 destinations, there are very few of the 42 destinations that cannot add that sort of capacity. So if you think through that, the scale is significant. So that's sort of the opportunity that we're looking to maximize at this stage. The other thing I should add to your previous point is 1 of the key parts of our strategy is -- we're not looking to use Ciena Group's balance sheet to necessarily build this.

We see this because there is so much appetite from third-party capital to be involved in this opportunity. It's highly like on that we would realize the opportunities in a very capital-light manner.

Yes. I mean the reality of that is our capital is already invested. It's just in the form of a car park. And so it's, in many respects, the shareholder already owns that land and it's how do we utilize the shareholders already invested capital in a way that sees this built out in a monetized way over a medium to longer term. .

Your next question comes from Salman Zeng with UBS.

Andrew, thanks for your time. First question was just on NOI margins. Do you expect NOI margins to be flat, up or down next year? And can you call out whether security costs would be a material drag in that number given, I guess, some of the security incidents in Sydney and beyond?

Yes. So thank you for the question. I think that what you've seen in this year is that NOI margin has actually improved. We did have the uptick in security costs, which we called out in 2024. The reality is that we adopted what was already considered and stated by the new solves coroner as being world-leading security arrangements we have already started to improve that in light of what did occur, unfortunately, and tragically at Bondi in 2024.

But we adopted those improvements in that hindsight very, very quickly. So we've done that. I think the better question would be to ask the others, what are they doing? Because we've already ingested that. You see that in our numbers. And I think that what you're now hearing is others are now having to play a bit of catch-up to get to a security posture, which is now, I would say, expected by the community in terms of the security arrangements in place at destinations countrywide.

Maybe next question for Andrew. If you triggered the medical provision for the sub notes today, the original 2030s noncore, what premium to par the estimate you'd be paying today is sort of 4 to 5 -- 4.5 years to run?

Look, the sub notes today are trading at a slight premium to par, and then the make whole would be over and above that any make-whole premium. So through today's lens, there would be a decent premium relative to some of the other transactions that we've done in the past, where we've been able to buy the sublets back at a discount to par.

So it's pretty obvious which type of market we would prefer to be executing those types of transactions.

Yes. Would it be circa 10% given the 4.5 years to run and I guess, where the base rates are for the U.S. [indiscernible].

It's not as simple as that, and maybe the IR team can take

you through later, but you've got to look at, firstly, the premium that you need to pay to where the notes are trading. And then you've also got to look at the cost to unwind the cross-currency swaps as part of that transaction. So there's 2 sort of key parts to the transaction, and they both can change depending on market dynamics.

But I think I'm saying it looks relatively more expensive through today's lens than what we've seen or what we've executed in the past. But the market -- as you can see, the markets can change overnight very quickly. So our job is to monitor those opportunities.

Great. But I guess if you look at the past 6 months, the AUD is appreciated versus the USD. So presumably unwinding that cross-currency stock if you hedged at $0.73 for AUD has improved. So I guess is it looking more attractive versus 6 months ago?

No. I just said no before. So I think you're getting lost into the detail here. I think it's probably best to take it off the call. The cross-currency swaps that we enter into the time swapped fixed coupons [indiscernible] Into floating Aussie. So -- but I'll leave it there and the team can take you through that.

Your next question comes from Colin Bruno with Macquarie.

Just maybe going back to the assumptions around guidance. Are you able to just clarify sort of 4% NOI was that like-for-like that you were talking about? And can you just give me an idea of where you see net debt at the end of the year, maybe in dollars and your weighted average cost of debt trend as you've sort of benefited, I guess, over the last 12 months? -- you're thinking what huge cost of debt will be for fiscal '26. .

Yes. So the first part to your question, we would expect the underlying like-for-like NOI to be around that approximately 4% mark. The second part to your question is on the weighted average cost of debt. So we're forecasting around 5.4% weighted average cost of debt compared to the 5.6% that we had in 2025.

And then the last part of your question. Yes, we basically, in terms of the amount of capital that we're looking to invest, as I said before, we're looking to invest about $170 million in operating leasing capital and then somewhere in the range of $250 million to $300 million for redevelopment capital.

And then the add-on to that is any capital management initiatives that we execute on that. We obviously payer distribution, which we've spoken about today with 4% growth in the guidance, plus any retained earnings that we have through and retained earnings from FFO less the distribution will help fund the majority of that CapEx.

And any assumption in relation to Carindale?

There's nothing included in our guidance, no. As we said that we will be looking to execute that purchase of units under the Creek provision which effectively means you can buy up to 3% every 6-month period. So I would expect it to be very gradual.

And maybe just 1 follow-on, just in relation to the development opportunities that you've talked about on the land. And if I heard correctly, and apologies if I didn't a lot of that land is existing car parks.

So I just wondered how much of that is tied up in leases with anchor tenants.

Yes. Look, I'd say that the opportunity is across the entire site. If you look at a typical Westfield shopping center. Some centers have vacant land. Some then they will also have on-grade parking and then there's also air rights over and above the shopping center. In terms of ease of execution, it obviously starts with the vacant land -- the next opportunity is then you'd look at on-grade parking and then the harder to execute is then looking on top of the shopping centers.

So it's fair to say that if you look at the opportunities, that's the way it's probably the way that we'd look to prioritize it.

I think if you look at the compendium when it comes out, you'll see side-by-side what's built for already versus the land parcel itself. .

Okay. And so if you -- and apologies, maybe it doesn't make sense to ask it this way, but the 670 was it a test. What portion of that is just vacant available land ready to go? And

Somewhere -- so the built form is somewhere between 40% to 50% of that -- so yes, so the residual is obviously -- it's used as car parts of arguably that's built for them. I think the point I was trying to make is, today, it its economic uses to house a car. In the future, we see it as housing a car and a lot more above it. .

Our next question comes from Simon Chan with Morgan Stanley. .

Do you have a specialty occupancy cost number? .

Yes. 17.2%.

Okay. So that hasn't changed over the last 12 months? .

No. We've seen really strong specialty sales growth, which is fantastic. -- exactly what strategy is about. It's growing visitation and helping our business partners perform and grow and then we're able to grow rents in line, if not better, than net sales growth.

Okay. Fair enough. And just a follow-up on your guidance. I think Henry talked about all the positive points, right, like comp NOI growth. I know you sold some assets, but then you're going to pay down debt, we these coming down. Why is guidance just 4%? It doesn't add up, it should be more than that. .

Yes. Simon. So I spoke about the 4% in terms of net operating income growth. I did talk about we do have some dilution from the joint venturing of Westfield Sydney and whistle chem side. Obviously, we're more than offsetting that dilution with the make-whole transaction that we've spoken about. We do -- there's $18 million of ECC that we had in 2025. We're not assuming that any of that would repeat we spoke about in my notes, I spoke about the New Zealand exchange rates. We have -- I'm getting into the detail here. There's lots of moving parts.

But things like the New Zealand exchange rate. The Australian dollar has strengthened significantly against the New Zealand dollar. So that's a bit of a drag. We are seeing higher tax expense. A lot of that is driven by lower interest rates in New Zealand, therefore, lower tax deductions. We spoke about some of the active projects, WiseBondEye, -- we've got Tiger, the David Jones replacement there. Those

Is that loss rent you're talking about the generally, yes. .

That's exactly right. So you have disruption to the existing space, whereby we're replacing it with more productive retailers over the long term. So those are some of the key moving parts. And it was at least

So how much is the loss rent incremental in '26 this year versus last year, about $10.

Yes. Yes, maybe a little bit more than that in December.

Your next question comes from James Druce with CLSA.

Similar to Simon's question on guidance. Is there anything for project management income in guidance?

No, we expect that to be relatively flat to 2025.

Okay. And apart from maybe refinancing that long betted bond you spoke about, is there anything else in refinancing side of things in guidance.

Look, we have assumed that we can do better than where the floating rate currently sits within that guidance number, but it's not the material movement is the make whole.

Okay. And you've had your cost of debt declining this year from 5.6% to 5.4% I mean it does feel like a bit of a tailwind despite the direction we've been talking about before. It does sound a bit low to me.

Yes. I think the other part what we've noticed with a lot of the sell-side analysts forecast is we're not seeing a regular updated floating rate curve within those forecasts. So the floating rate increase, although we're relatively highly hedged that does have an impact on the unhedged part of our debt.

I thought you were 99% hedged. What's your hedging --

At the start of the year, and then that comes down to 82% at the end of the year. So the average is sort of in the higher 80s. So there is still a component of our debt that's exposed to the floating rates.

Your next question comes from Ben Brayshaw with an Joy.

Eli, thanks for the presentation. I was wondering if you could comment or perhaps it's a question for Andrew. Just the expected credit charge and the lease that's come through what that relates to, I thought that you might have been through that releases prior allowances that have been made. And just did that come through in the second half? Or how is that recognized over the course of the year? .

Yes, the expected credit charge release came through in the second half of the year. Really, what it comes down to is the strength of collections that we've had from a rent perspective and the aging of our debtors. So what you've seen, which you can't see just with the headline numbers, but the quality of our debtors has improved dramatically, where we've been able to collect some of the long-dated debtors that were outstanding and resolve some of the outstanding issues that we had previously provided an expected credit allowance for we've resolved the issues commercially, and we've been able to then collect some of those debtors and then therefore, release the ECC. We're not assuming any further release looking forward.

It doesn't mean that we've we're not pursuing more opportunity in that space. But at this stage, we're not assuming any further upside from that in 2020.

Your next question comes from Richard Jen with JPMorgan.

Another question for you, Andrew, sorry. Just what was the write-down on project income booked in the Market Street development? And then why is there no growth expected in project income in '26.

Yes. So we spoke about this at the half year results. There was around a $15 million loss or write-down that we were booked in the first half of 2025. We did have a bit more cost in the second half, but we've been able to offset that or more than offset that by other project income that we had come through on smaller bits and pieces of work that have happened across the portfolio. In terms of 2026, project income, we we're not expecting a lot from joint venture assets.

So if you look at the major development that we're talking about is Westfield Bondi which is 100% owned. So therefore, there's no joint venture project income that we generate on that capital investment. And yes, so there's no -- that's why we're assuming that it's relatively flat to 2025.

Okay. And then just a second question for Elliott, just on Carindale, why was you not just take it out, it's not an overly material transaction for the group.

I try to see how I answer that because I were to hat. I think you can see with the creep revision, we see it as a good value long term for the group. Having said that, the -- it's probably leaching into areas that I shouldn't be talking about in terms of what our intentions may or may not be longer term in terms of whether Crandall remains as is or doesn't.

So I am going to avoid that question and because it's probably not prudent for me to actually answer it in that way other than to say that what we've been now today is what we'll be doing, which is creeping.

Okay. Can I maybe ask it another way. So it looks as though the ownership structure in terms of the joint venture partner is likely to change at some point this year. Do you think that provides an opportunity to perhaps wasn't there whilst land lease was as the partner?

I don't believe it does. Because if you recall, Wesfil back in when it purchased its interest in Carindale Property Trust for an existing structure, which was set up by Suncorp and Suncorp has some preemptive mechanics within their documents which don't mirror necessarily the preemptive mechanics that we would normally see in a Westell a joint venture or a center group joint venture.

And so the change of control of doesn't necessarily result in a preemption action. It might, depending on how it's done or when what happens, so it's hard to comment on speculation of what may or may not occur other than to say that it does -- that the arrangements that are in place because we are brought into a structure that was preexisting is different to what you would normally see in a Westfield -- now Center Group joint venture arrangement.

Your next question comes from Claire McHugh with Green Street.

Just a quick 1 on capital allocation as a follow-up to Tom's question. I'm just curious in your big picture how you're thinking about that decision matrix. So clearly, Bondounext cab off the rank on kind of been put on the back burner. Is that really just a function of the return profile? Or is there the more to it? And how are you thinking about the future priorities in terms of opportunities in the development pipeline?

Yes. I wouldn't say that Veraguas been put on the back burner. I think that the scale and size and how we do Burgan probably has changed in the last 3 years where we've pivoted away from taking an entire center out of income production and then rebuilding it and hoping people come back and generating some return. Some say it's going to be not begun, but where it's been done somewhere, particularly in Sydney, that might get to a 6 at some point in time.

Rather, we prefer to incrementally add and add to the offer whilst the center keeps trading. And so the opportunity of Bondi presented itself as a more immediate opportunity. We were able to actually make that occur due to the change of control that happened at David Jones, that accelerated our ability to bring forward plans, much needed plans, I would say, to ensure that bond junction retains its premium position not only in our portfolio, but certainly in Sydney and 1 of the best in the country arguably the world.

And so we're taking advantage of that. At the same time, we're still predeveloping work on Bergen, and we would be expecting that, that would occur sometime either later this year or early next year. But again, in a way which maintains the existing center, a little bit disrupted, unfortunately, but in the main with people still being able to come and spend time and transact with businesses during that redevelopment activity.

That's clear. And just another one. Obviously, department store shadow supply is favorable for Center Group. But just curious, just with David Jones continuing to rightsize their portfolio. Can you just provide -- I know you can't provide specifics on Lyra and David Jones, but perhaps just a bit of color around David Jones sort of decision matrix.

I mean their productivity is a lot stronger than Myers, generally speaking. Are the stores that they're closing materially underperformers or how do those stores compare to the general footprint of the department stores in your portfolio? Just trying to get a sense of the potential phasing of this shutter supply.

Yes. I think -- and the public compendium will have a lot more detail on this. But what you've seen -- this is not a new phenomenon. This has been going on for decades, where the payment stores have been downsizing we can -- many of us unfortunately who have aged in life. I can remember, department stores being somewhere between 25,000 and 30,000 square meters. The right size now is somewhere between 10 to 12000 square meters, maybe even slightly lower.

A lot of that has to do with the brands that they're selling are actually taking stores stand-alone stores with us and paying a much higher rent to do so. So the economics for us is Sensor Group is a better economic outcome. What it also means is that we are getting space back, which allows us to redeploy for that higher and better usage. So what is the magic number.

I don't think we all know. But what I can say is that the methodic way that this has been dealt with over a long period of time has meant that what might have been a concern around an existential or unusual event of everything going under and having to redo it is being played out differently, which is we're rightsizing and we're doing so in a very economic way that makes money for shareholders.

I guess, obviously, there's a recap coming with David Jones. So just curious to see if we're going to see a much stronger way of either full closures or reducing rightsizing the actual store size.

Yes. And I think in the part that to bear in mind is that our leases with David Jones are fairly long for many years of duration still to go. And unlike our peers, we actually have bank guarantees. So the -- not just the net asset value test. So the ability for someone to come in and Phoenix to get out and effectively put a gun to our head is actually fairly limited in that scenario because if they like doing so, they'll be giving up real cash in the form of the bank guarantees coming back to us. That was -- I mean that was a major, a major I suppose, demands on the right work. A major component of why we gave our consent to the change of control to ensure that we had longevity of security that whoever was trading in that site, continues to trade in that site. And if they weren't, it would cost. And so I think we're in a good position vis-a-vis that.

There are no further questions at this time. I'll now hand back to Mr. Rosen for closing remarks.

Well, thank you, everyone, for making the time today. I'm sure we'll get to see a lot of you in the days and weeks ahead. And if there are any questions in the meantime, then please do reach out to us. And I know there were some very detailed questions on the call, which will follow up immediately after it is to help connect the dots. But thank you for your time today, and inform to seeing you soon. Thank you.

That does conclude our conference for today. Thank you for participating. You may now disconnect.