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Vicinity with some Specialty Store growth

The Vicinity quarterly update released this week showed a slight improvement in specialty store sales (up 2.0%) but further weakness in department store sales (down -5.0%).

Mr Grant Kelley, CEO and Managing Director, said: “We are particularly pleased with the positive momentum maintained in specialty store sales growth during the September 2019 quarter, as we continue to execute on our strategy and further enhance the portfolio through active tenant remixing, and progressing our retail and mixed-use development opportunities.

Mr Kelley said total portfolio MAT was up 2.6% and benefited from a continued improvement in its Western Australian (WA) portfolio, which delivered 3.4% growth in sales during the September 2019 quarter and 2.7% total MAT growth, up 110 basis points compared to June 2019 MAT.

  • Specialty store (<400 sqm) moving annual turnover (MAT) growth of 2.0%, up from 1.7% at Jun-19

  • Specialty store MAT of $11,164 per sqm, up 6.0% over the past year

  • Specialty store and mini majors MAT growth of 3.0% (Jun-19: +3.1%), featuring strong growth in luxury retail of 34.7% (+5.1% on a same-store basis)

  • Discount department stores (DDS) MAT growth of 2.9%, up from 2.4% at Jun-19

Vicinity provided a brief update on its development activities, including;

  • The Glen, VIC: Opened final major stage of redevelopment in August 2019 and third-party developer commenced residential apartment construction in July 2019

  • Roselands, NSW: Lower ground floor transformation opened September 2019

  • Hotel Chadstone, VIC: On track to open 1 November 2019

  • Emporium Melbourne, VIC: Southern Hemisphere’s first-of-its kind video gaming and esports entertainment venue Fortress Melbourne to open early 2020

  • Ellenbrook Central, WA: Construction commenced on new Kmart store, three mini majors and 15 specialty stores in August 2019

  • Victoria Gardens Shopping Centre, VIC: Acquired adjacent land enabling planning to progress on a retail expansion and mixed-use development

Vicinity did not provide any update on guidance to earnings or performance of the REIT.