CREATING LIFESTYLE DESTINATIONS Annual Report 2017 Inside
02 ur erating odel 04 Chairman’s Review 06 and anaging ire tor s eview 08 ur erating and Finan ial eview 22 ur Portfolio 30 ur Peo le 32 igital 34 ur Board 37 ur xe utive ommittee 40 Tax Trans aren y 43 Sustainability Assuran e Statement 44 Financial Report 45 ire tor s e ort 49 Remuneration Report 67 Finan ial Statements 107 nde endent Auditor s e ort 113 or orate ire tory
About this report This annual report is a summary of Vicinity Centres’ operations, a tivities and finan ial osition as at une 17 n this report references to ‘Vicinity’, ‘Group’, ‘we’, ‘us’ and ‘our’ refer to i inity entres unless otherwise stated eferen es in this re ort to a year and FY17 refer to the finan ial year ended une 17 unless otherwise stated All dollar figures are ex ressed in Australian dollars (A ) unless otherwise stated This annual re ort dis loses i inity s finan ial and non finan ial erforman e for FY17 and has been re ared using elements of the ntegrated e orting framewor ore information particularly latest company announcements and detailed sustainability re orting an be found on i inity s website i inity is ommitted to redu ing the environmental foot rint associated with the production of the annual report and printed copies are only posted to securityholders who have ele ted to re eive a rinted o y This re ort is rinted on environmentally res onsible a er manufa tured under S 1 1 environmental standards The following symbols are used in this re ort to ross refer to more information on a topic:
References additional materials within this report References additional materials on Vicinity’s website
Disclaimer This re ort ontains forward loo ing statements in luding statements indi ations and guidan e regarding future earnings distributions and erforman e The forward loo ing statements are based on information available to i inity entres as at the date of this re ort (16 August 17) These forward loo ing statements are not guarantees or redi tions of future results or erforman e ex ressed or im lied by the forward loo ing statements and involve nown and un nown ris s un ertainties assum tions and other fa tors many of whi h are beyond the ontrol of i inity entres The a tual results of Vicinity Centres may differ materially from those ex ressed or im lied by these forward loo ing statements and you should not la e undue relian e on su h forward loo ing statements x e t as re uired by law or regulation (in luding the AS isting ules) we underta e no obligation to u date these forward loo ing statements
Chadstone, VIC From local shopping centres to premium retail destinations that compete on an international stage, we aim to enrich our communities by providing unique centres with the shops, services and amenities that they need.
Performance Highlights
Statutory net profit after tax $1,583.6m FY16: $960.9m
Distribution per security 17.3 FY16: 17.7¢
Total return1 15.5% FY16: 12.8%
Employee engagement score 71% FY16: 66%
Green Star Performance portfolio rating 3 Stars FY16: 2 Stars
Occupancy rate 99.5% June 2016: 99.4%
1. Calculated as: (Change in net tangible assets per security (NTA) during the period + distributions declared)/opening NTA.
Vicinity Centres Annual Report 2017 01 Our Operating Model Enriching community experiences
Our resources Our value add We evolve and optimise our Our strategy is to create unique and relevant resources to complement and enhan e our o erating model consumer experiences, deliver compelling value for our retail partners and strive for Capital excellence in everything we do. a ital from our e uity and debt investors and strategi artners People A highly engaged and a able wor for e Real estate A resilient and sustainable ro erty ortfolio Data and systems Networ a ability data ro esses and our insights Deliver the best retail and intelle tual ro erty mix and engaging Brand experiences to attract Brand and re utation under inned consumers and support by strong sta eholder relationshi s our retail partners.
External in ences e embra e o ortunities and manage material ris s resented by our external in uen es
Financial and property markets Fa tors that im a t the a essibility ri ing and li uidity of our a ital and real estate assets Enhance our portfolio Consumer and retail trends quality through hanging lifestyles needs and select developments, behaviours of onsumers and mar et divestments and for es that affe t our retailers acquisitions. Local community emogra hi ultural so ial and economic characteristics where we o erate Environment A essibility and ost of resour es and the im a ts of limate variability
02 Vicinity Centres Annual Report 2017 Our outcomes e reate shared value by enri hing ommunity ex erien es
Solid investor returns 4.6% om arable underlying PS growth 15.5% total return (FY16 1 )
Successful retailers and satisfie c stomers $9,429 per sqm s e ialty store AT (u 6 on FY16)
Highly engaged people 71% engagement s ore (FY16 66 )
Better communities $1.8 million community investment Intensively (FY16 1 million) managing our 8% centres to drive redu tion of arbon intensity on FY16 income growth (down to 71 g 2 e s m) and operational efficiencies.
Find out more about our strategy and how we create shared value for our stakeholders in the following pages.
Vicinity Centres Annual Report 2017 03 Chairman’s Review
Dear Securityholders I am pleased to present to you Vicinity Centres’ (Vicinity’s) 2017 Annual Report.