Scentre Group (SCG) Earnings Call Transcript & Summary

Good morning, everyone. I'm Maureen McGrath, the Company Secretary of Scentre Group. I've been invited by our Chair, Ilana Atlas, to commence the meeting by running through some housekeeping matters with you. As a courtesy, I would ask that you switch your mobile device to silent. Today's AGM is a hybrid meeting. Securityholders have been provided with instructions as to how to participate and vote in the Notice of Meeting and Online Meeting Guide, which is available on the group's website. Voting on all resolutions will be by way of a poll. Securityholders who are present in the room today have received voting cards with the QR code. If you are eligible to vote, you can scan the code with your mobile device. This will take you to an online voting page. Please accept the terms and conditions, and press the Vote icon. Once the Chair declares the polls open, all items of business before the meeting will be displayed on your mobile device along with the voted. To hit Submit or Enter button as the vote is automatically recorded. You may change your vote by pressing a different voting option up until the time the Chair declares that the polls closed. Proxy holders with directed votes will have those votes automatically voted as directed. All open votes held by a securityholder or a proxy holder will be voted according to the option you select. If you're in the room today and do not have a mobile device or are having any difficulties, you can complete the voting items on the reverse side of your attendance card. You'll need to give the completed card to a Computershare representative as you leave the room. For securityholders participating in the meeting online, you will see a voting item at the top right-hand side of the page, which will take you to online voting. Instructions for how to ask questions or vote are set out in the Computershare online meeting guide. You can submit questions on the items before the meeting through the online meeting platform at any time during the meeting until the end of the questions in relation to the relevant item. [Operator Instructions] Although you can submit questions from now on, they will not be addressed until such time as the item is being discussed. Questions may be moderated or if we receive multiple questions on one topic, they may be answered together. We also have a telephone line open, and you can access the telephone line on our website by registering. [Operator Instructions] The securityholders with us in the room, you can ask a question by approaching the microphone attendant, showing your attendance card and providing your name. If you're unable to go to a microphone, we will bring one to you. Thank you very much, and I now hand you to our Chair, Ilana Atlas.

Thanks, Maureen, and good morning, everyone. Welcome to the Annual General Meeting of Scentre Group Limited and the meetings of securityholders of Scentre Group Trust 1, Scentre Group Trust 2 and Scentre Group Trust 3, which are being held together this morning at this meeting. My name is Ilana Atlas, and I'm privileged to be the Chair of Scentre Group. Our AGM is being held as a hybrid meeting today. I'm conducting the meeting from the Wesley Conference Center in Sydney, and securityholders can also participate online and ask questions on the telephone line. The Company Secretary has informed me that a quorum is present, and I declare the meeting open. I'd like to acknowledge the Gadigal people of the Eora Nation as the Traditional Custodians of the land we're on. And I recognize that people viewing the webcast of this AGM may be on different lands of different Traditional Custodians. I'd like to pay my respect 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'd like to welcome on stage with me my fellow nonexecutive directors, Mike Ihlein, Catherine Brenner, Steve McCann, Margie Seale, Guy Russo, Carolyn Kay and Mike Wilkins, as well as our Managing Director and Chief Executive Officer, Elliott Rusanow, and Maureen McGrath, our Company Secretary. Mr. Mike Wright, representing the group's auditors, EY, is here today, and we are also joined by members of Scentre Group's executive team in the audience. The Notice of Meeting has been made available to securityholders, including on the group's website, and I'll take the notices having been read. Maureen has already run through housekeeping matters with you. I would ask that any questions and comments relate to the items being before the meeting. I now move each of the resolutions in Items 2 to 10 of the Notice of Meeting, and open the polls in respect of each of these resolutions. As Chair, I've been appointed proxy by a number of securityholders. These included 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 10. I now formally vote all directed and undirected proxies in respect of Items 2 to 10. 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 declare the polls for the resolutions in respective items 2 to 10 closed. Barry [indiscernible] 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'd now like to say a few words about the performance of our company. Elliott will address our financial and operating performance following my remarks. 2023 was a very successful year for the group. The group delivered strong financial and nonfinancial results in a responsible and sustainable way, focusing on short-term and long-term value for securityholders. The Scentre team delivered improved year-on-year performance and invested in the future of the business. Our Westfield destinations are part of the social fabric of the communities we serve and located in some of the most populated cities of Australia and New Zealand. It has been very pleasing to see continued strong demand for what we offer in our destinations, given elevated inflation and moderating economic growth. This highlights the relevance of the group's strategy to create the places more people choose to come more often for longer. Our destinations are well positioned to play a role in the future growth of our communities and local economies. The group delivered strong financial performance with 5.2% growth in funds from operations. Distributions to securityholders were $860.6 million or $0.166 per security, which represented growth of 5.4% and was above guidance. During 2023, we transitioned our Board leadership with Brian Schwartz retiring and my commencement as Chair from 1 October. This followed Chief Executive Officer and Chief Financial Officer succession, in 2022, led by the Board under Brian's stewardship. On behalf of the Board and securityholders, I would like to acknowledge Brian's contribution to our company from its establishment in 2014 as a Director and then as our Chair from 2016 until 2023. His leadership played a critical role in shaping our Westfield destinations, strong connections to customers, businesses and communities. Continuing to build a strong organizational culture and being the place where talent thrives is a key focus of the Board. We have a comprehensive plan in place to listen to and engage with our employees. During the year, we were greatly encouraged by our company-wide pulse check, where 91% of respondents said they would recommend the group as a place to work. Delivering our results in a responsible and sustainable way remains a priority. We have a strong track record in delivering on the 4 pillars of our responsible business framework of community, talent, environment and economic performance, yet we know we have much more to do. Recently, the group released its 2023 responsible business report, climate statement and modern slavery statement, providing a comprehensive update on our progress. These are all available to you online. On gender diversity, we are making progress on our 40/40/20 target with women representing 44% of the Board, 40% of executive key management personnel and 57% of the total workforce. We have a target to achieve net 0 Scope 1 and 2 emissions across our wholly owned Westfield destinations by 2030, and are on track to achieve this. Since 2014, we've achieved a 41% reduction in Scope 1 and 2 emissions across our portfolio. We continue to focus on the 3 pillars of our net zero strategy, which include optimizing Scentre efficiency, generating and procuring renewable energy and reducing residual emissions. We are also focused on waste management and are committed to achieving our 2030 goal of waste recovery from operations of 90%. As I said earlier, our people are the key to our success. Investing in our talent and their capabilities is integral to our strategy and growth. Throughout the year, the Board and the Human Resources Committee have carefully considered remuneration so that our remuneration objectives are met, attracting and retaining the best talent, fairly rewarding our employees and aligning the experience of our employees with our security holders. The Board is with a view that the remuneration paid to executives in 2023 appropriately balanced paying for performance and alignment with the interest of our securityholders. The detail of these decisions and other remuneration matters are set out in the remuneration report, which is the subject of a vote of securityholders later in the meeting. The poll on the remuneration report for Item 5 has not yet been taken. However, based on proxy votes already received, we expect to fall short of the required threshold of 75% by a narrow margin. We're disappointed, however, we welcome in the highly valued feedback from securityholders and other key stakeholders, and we'll certainly take these views into account before we come back to you next year with our remuneration report. We look forward to continuing our engagement with securityholders on our remuneration practices. As a Board, we are always looking to ways to improve our effectiveness and add value to the group. On the April 1, 2024, we restructured our Audit and Risk Committee to establish an Audit and Finance Committee and a Risk and Sustainability Committee. This reflects our focus on being a responsible and sustainable business, and the time we believe we need to dedicate to community and environmental matters. Today, Carolyn Kay, Guy Russo and Margie Seale are standing for reelection. Carolyn, Guy and Margie will address you shortly in respect of their respective reelection or with the full support of the Board. The Board is committed to regular engagement with our teams. Collectively and individually, our directors have visited many Westfield destinations throughout the year, including in New Zealand and Queensland, and hosting our December Board Meeting at Westfield Parramatta in Western Sydney. I look forward to visiting many more members of our team and our destinations throughout this year. I would like to acknowledge all members of the Scentre Group team for their commitment to serving our customers and communities throughout 2023. I'd also like to thank my Board colleagues for their commitment to Scentre Group and its securityholders during another important year for our company. Thank you to you, my fellow securityholders, for your ongoing support of our company. I'd now like to introduce our CEO, Elliott Rusanow, to speak to the meeting. Elliott?

Thank you, Ilana, and good morning, everyone. Our strategy to create places and experiences that more people choose to come to more often and for longer has delivered strong operating performance in 2023. I am very pleased with our results and thank the team for their achievements during the year and remaining focused on our customers. Funds from operations was $1.094 billion or $0.2111 per security, up 5.2% on the previous year. Net operating income increased by 8.8% to $1.951 billion. Customer visitation to our 42 Westfield destinations was 512 million, up 32 million or 6.7% on 2022. This was underpinned by our activation program, focused on giving people more reasons to spend their time with us. This included new strategic partnerships with global leading brands such as Disney and Live Nation as well as Netball Australia. We have extended our partnerships with these brands, which will include a year-long calendar of unique experiences for our customers. During 2023, our business partners achieved $28.4 billion in sales, an increase of $1.7 billion or 6.4% compared to 2022, and representing a record across our Westfield platform. Demand from business partners continues to be strong, with occupancy increasing to 99.2% at the December 31, 2023, compared to 98.9% at the end of 2022. During the year, we completed 3,273 leasing deals, which included 307 new brands to the portfolio. On average, specialty escalations, rent escalations increased by 7.5% and new lease spreads improved to 3.1%. We collected $2.723 billion of gross rent during the year, an increase of $131 million compared to 2022, and equivalent to 103% of gross rental billings for the period. Our strategic customer initiatives include our Westfield membership program, which now has 4 million members, an increase of 830,000 since the beginning of 2023. In November of 2023, we successfully opened the final stage of the $355 million investment in Westfield Knox in Melbourne, of which our share was $178 million. Visitation at Knox is 14% higher than the comparable period in 2019 before the redevelopment. We are well progressed on our expansion at Westfield Sydney on the corner of Market and Castlereagh Streets in the Sydney's CBD. The group will introduce 6,000 square meters of new luxury retail space over 5 levels, including the new Chanel boutique. Other brands to join the expanded Westfield Sydney include Moncler, Omega and Canada Goose. During the year, we commenced redevelopment at Westfield Mt Gravatt in Brisbane and Westfield Tea Tree Plaza in Adelaide to introduce new usages and business partners. We continue work -- continue to progress work on predevelopment on our $4 billion pipeline of retail real estate opportunities. Planning has commenced at Westfield Bondi Junction in Sydney to repurpose the Level 1 of the current David Jones department store space. Our strategy is to optimize Bondi by introducing elevated wellness, health and luxury experiences as well as new entertainment and lifestyle experiences that will reinforce this leading destination. Planning for long-term investment opportunities at Westfield Booragoon in Perth is also ongoing. The group's destinations are located on more than 670 hectares of land holdings primarily located in major population and growth regions across Australia and New Zealand. This provides the group with potential long-term strategic growth opportunities. The group continued to be proactive with respect to capital management, including increasing our interest rate hedging at attractive rates and repurchasing USD 300 million of subordinated notes. At the December 31, 2023, the group had available liquidity of $3.5 billion, which will cover all debt maturities until the end of 2025, and we continue to maintain our single A credit rating. Progress also continues on our pathway to net zero by 2030 for our Scope 1 and 2 emissions with the recent completion of rooftop solar installations at Westfield Fountain Gate, Knox, Hornsby and Tuggerah. Together, these installations more than double the group's solar generation capacity to 12.2 megawatts. We have entered into long-term energy agreements in New South Wales and Victoria, which, together with our agreements in Queensland and New Zealand, will assist us in achieving net zero by 2030. As mentioned by our Chair, during the year, Brian Schwartz retired from our Board. And I would also like to thank Brian for his support and guidance to me over many years. We are very pleased to establish a scholarship for excellence in his name at Westfield -- at Western Sydney University. This scholarship will commence this year. I am pleased to report that attracting even more people to our destinations remains our focus into 2024. For the first 12 weeks of this year, we have welcomed over 118 million customer visits. This is an increase of 2.1% or 2.4 million more visits when compared to the same 12 weeks in 2023. Total business partner sales for January and February this year are 3.1% higher compared to 2023 and 13.4% higher than in 2019, representing a $3.5 billion increase since 2019. Our focus on creating extraordinary places and experiences where people choose to spend their time enabling more businesses and brands to connect with more customers is expected to continue to deliver growth in earnings and distributions. Our Westfield destinations, strategic land holdings and our unique brand provides significant long-term growth opportunities for the group. Subject to no material change in conditions, the group expects funds from operations to be in the range of $0.2175 to $0.2225 per security for 2024, representing 3% to 5.4% growth for the year. Distributions are expected to be at least $0.172 per security for 2024, representing at least 3.6% growth for the year. On behalf of our team, thank you for your support. I will now hand back to the Chair. Thank you.

Thanks, Elliott. So I 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 10, we'll proceed to discuss each item in turn. Questions from securityholders will be taken on each item of business, and all questions should be addressed to me as Chair. [Operator Instructions] Item 1 is a discussion of the group's 2023 financial statements and reports. This item is not the subject of a vote. Mike Wright from EY, the group's external auditor, is available to respond to any questions relevant to the conduct of the audit, the preparation and content of the auditor's report, the accounting policies adopted by Scentre in relation to the preparation of the financial statements, and the independence of the auditor in relation to the conduct of the audit. I'll now ask any securityholders with questions on item 1, the discussion of the group's 2023 financial statements and reports, to make their way to the microphone, submit their questions online, or if participating through the telephone line, press #1. So let's start in the room.

My name is David Kingston from K Capital. I'd just like to make a few comments initially and then a question to you, please. Look, overall, high-quality Board, fantastic assets. But in my opinion, the outcome is pretty poor. Scentre has so many iconic centers that so many Australians utilize regularly. Huge barriers to entry, given large land required, development issues and massive replacement cost. To be frank, I was a bit surprised in reading the '23 annual report. There was a lot of self-congratulations, perhaps complacency. In my opinion, objectively, Scentre's performance as an investment has been underwhelming. Let's look at Frank Lowy. He sold all of his shares in Scentre in 2019 for around about $4 a share. Since then, the stock has underperformed, and it is now $3.26 today. Yes, there's been a distribution yield, but a nasty capital loss from the date Lowy sold. Yes, we accept other REITs have been weak also, and there are other ones like Goodman's that have shut the lights out. But in my opinion, with Scentre's iconic assets, it's a sad outcome. Investors who chose to buy Sydney house or apartment over the same 5-year period have accrued substantial capital gains. Scentre has delivered a loss. Let's look at the 5-year metrics in the annual report, Page 4, right upfront. Very unimpressive. I disagree with Elliott's comment who quotes "Our focus has delivered strong operating performance." I don't think you're properly looking at the 5-year stats, Elliott. Of particular concern is the sharp fall in key stats. Let's look at it. Over the 5 years that you're prominently putting upfront Page 4 annual report. Operating profit, $1.27 billion, down to $1.07 billion. Operating profit per security, $0.24 down to $0.21. FFO per security $0.25 down to $0.21. Distributions per security, $0.22 down to $0.16. And an overall fall in these key metrics of 12% to 25%. Now when you adjust for inflation, Chair, in real dollars, the 5-year performance metrics have declined even more substantially. And I note that Scentre is only forecasting 3% to 5% gain in FFO this year, which is basically in line with inflation. Let me turn to a couple of specifics, NTA, NAV. Strangely, there's no reference in the 5-year overview to the key metric of NTA, which is $3.44 per unit. Importantly, the Scentre investor presentation also refers to economic NAV per security, which adds back $1 billion of fair loss on derivatives and also adds back $3.3 billion for property management rights. On that basis, according to the Scentre's own presentation, the economic NAV is $4.28 per security. Now with the stock price at $3.26, that is a massive 24% discount to economic NAV. Couple more specifics, debt levels. Total senior debt $11.5 billion. Then we have the sub debt, $3.9 billion as at 31 December in A dollar terms. I would congratulate the financial controller who issued the sub debt at excellent terms a few years ago. That sub debt at very low interest considering the terms moved down from $1 in the down into the $0.8. In fact, I bought quite a few in the $0.8. Its enabled Scentre to have relatively cheap funding given the terms and to buy back some sub debt at a decent discount. The problem, though, is that the sub debt will move to much higher rates at the next reset date. The first bond that has a reset in '26 and a headline 4.75% coupon, its rates, unless redeemed, will be lifted to the U.S. 5-year treasury plus 438 points in 2 years' time. So at current U.S. treasury rates, Scentre will need to pay 9% per annum if it doesn't redeem those notes. The second sub debt bond matures and resets in 2030. The much higher coupons, if not redeemed, will have a material impact on FFO. The final specific point I wanted to raise, and then I will ask a question, Chair, gearing. In my view, some of the information is a little bit selective or misleading. The debt -- quasi-debt of Scentre is the sleeping elephant in the room. When you include the $3.9 billion of sub debt, the leverage ratio, Chair, jumps to 84%, which is total debt of $15.4 billion, less $300 million of cash, divided by net assets of circa $18 billion. So 84%, which is a very, very, very high leverage ratio. Indeed, one of Scentre's debt covenants is the leverage ratio. Net debt to net assets shall not exceed 65%. The only reason you're not in breach of that is because you are not counting the sub debt in that covenant. Even excluding the sub debt, you are only marginally ahead of that covenant, and the leverage ratio drops to 62%. So my question, few limbs to a chair. Given the 5-year results, in my opinion are poor, just appreciate your thoughts. COVID is well finished, so no longer an excuse. Yes, interest rates are higher, but Scentre is partly sheltered due to long-term fixed debt rate, and well done to the financial controller. In my opinion is -- Scentre has too much debt, including its bonds. I'm just worried as to whether Scentre is over capitalizing its centers. Our head office costs too high. I'd be interested in thoughts about have online sales hurt? Are specialty store rents moving in the right direction as a percent of sales? So in summary, I'd just appreciate your thoughts, Chair, or anyone else who would like to comment. Why has FFO and distribution per security reduced so substantially over the past 5 years, in nominal dollars, if you adjust for inflation, the fall is very substantial. Thank you.

Thank you, Mr. Kingston. Thank you for your comments. Before I ask Elliott to respond, I'd simply say that it's -- if you reflect on the last 5 years, it's overall to say that COVID's finished, but the effect on COVID was very dramatic on our business, which was very clear. And I think we, as an organization, managed probably better than most in getting through the shock of COVID, and have brought back the business, I think, in very strong shape and able to get back to the numbers we had achieved 5 years ago. But why don't I let Elliott respond.

Firstly, maybe to clarify, our covenant is based on debt to total assets, not debt to net assets. So our debt to total assets, even if you were to include the sub note, is around 40%, well below the covenant that you referred to.

Sorry, Elliott, there are 4 covenants. You may not be aware of it all. It's in the annual report. And what I've read is absolutely correct, but you may not be aware of it, maybe your financial controller can comment or your auditor.

I was the former financial controller. And I can tell you that our covenants are debt to total assets. Maybe perhaps after the meeting, I'll take you through where in the annual report you're referring to. But even with the sub note debt, and we do know the comment that you make about the sub note debt being an innovative way of protecting securityholder value during what was an unusual period or extraordinary period during COVID. We look at the ability to redeem that debt or the sub notes in 2026 and 2030 as a potential opportunity to reduce the total cost of borrowings for the group and provide a potential tailwind to earnings at the FFO line for securityholders into 2026 and into 2030, obviously, dependent on where interest rates are at that point in time and the manner in which we redeem those notes. But our intention is to redeem those notes at each of those call dates. The other aspect that I would note further into Ilana's comment regarding referring back to 5 years ago. At a top line EBIT, we are achieving record EBIT numbers. I did quote an 8.8% growth in EBIT to $1.951 billion, that is the highest level of EBIT group has ever achieved, even referring back to 2018. It's important to note further to Ilana's comment that during the COVID period we were mandated by various regulators to effectively receive half rent or less than half rent, which has meant that during that period, not only did we see a reduction in occupancy, but we also received a reduction in cash flow. We have worked very hard over the course of 2022 -- late 2022 when restrictions start to be lifted, through 2023, which was probably the first full year which was unimpacted by COVID in a regulatory sense, certainly has impacted from a visitation sense, to push -- to focus on giving reasons for more customer visitations to come. But we're not back to the levels that we had seen in 2019. In 2019, customer visitations were 540 million. As I said, during 2023, they're 512 million. So we still have a way to go. Our peak occupancy in 2019 was 99.5%. We achieved 99.2%. And our targets for this year would see that occupancy continue to increase. So what I would say is that we are on a journey of returning back earnings to what they hopefully were prepandemic, but that is a journey that continues. Part of that will be to continue to drive record levels of top line EBIT as well as managing our interest rate expense in order to deliver FFO growth for securityholders. But we do have to recognize that we have been through a period which impacted our business more than most and impacted our industry more than most, not only because of the pandemic but because of the regulation that was specifically targeted our business and our industry.

Do you want to mention specialty rents?

Yes. And so to your comment about specialty rent, specialty rents increased by 7.5% during the year. Specialty rents are actually now at the highest level on average per square meter than they have been since the establishment of Westfield, in fact, 6 decades ago. And that continues to be the case. We have the lowest level of holdovers, and really the driver of occupancy is what's driving the growth in top line earnings. The other point to make as well is that the level of productivity that's being achieved by our business partners of $28.5 billion is $3.5 billion higher than pre-pandemic. And so the level of activity that's occurring within our destinations is at record levels. It's substantially higher. And it's because of that focus on driving customer visitations, which has facilitated that elevated level of activity for our business partners, has driven demand for space and provides us what we believe is the opportunity to continue to drive both EBIT and FFO growth, which is what we're guiding to, but recognizing that we are also guiding to not only growth in 2024, but our expectation of continued long-term growth into the future. And I would point out that our guidance is vastly different to our peer groups, which are generally in our industry guiding to negative earnings growth versus what we are guiding to, which is positive earnings growth on top of positive earnings that has been delivered in 2023.

Ms. Li, how are you?

Good. Thank you, Chair. Good to see you. And thank you and the Board for your performance. I've taken onboard the comments made by the earlier gentlemen. But let's see. My first question concerns property valuations. I noticed on the FFO that there was a substantial proportion of that was made up from a positive increase in the property valuations, but on the balance sheet, it's negative. It seems to be a bit of a contradiction. Can you explain that or elaborate?

Sure. So we independently value our properties each year. And there are a number of things taken into account by valuers in considering the valuation of our properties, probably most importantly, cap rates, which interest rates significantly impact and other matters. And so as a result of that, there was a revaluation of some of our assets down. But I think we managed to offset a significant amount of that revaluation by strong net operating income performance.

The only point I'll also make is FFO does not include property valuations. So FFO is purely a cash flow measure, similar in many respects to how other companies would traditionally report profit from operations.

Yes. I did see that the decrease on your balance sheet was driven by the change in the capitalization rate, particularly over the Australian portfolio, the New Zealand portfolio, even though they are in recession there, has hardly moved. But they just seem to be a bigger increase in the FFO given Fed's operations have improved by about $200 million, whereas the total revaluation was about $1 billion. But we can -- if you don't want to comment further on that, we can move on a bit. As far as your environmental performance, yes, I was pleased to see that you've nearly completed your rooftop solar program. I was wondering what other measures you might have taken? Have you implemented or considered things like rooftop gardens to reduce the greenhouse impact on your shopping centers and things like rainwater harvesting?

Yes. So we have what we call an integrated environmental plan where we consider a number of different elements, which go to improving our environmental impact. Water is one of them. And so water harvesting is an important element of that, how we effectively manage waste management -- waste is another element of that. And similarly, everything, all aspects of emissions. So as you said, we've introduced solar panels across a number of our destinations. In addition to that, we've entered into power purchase agreements, which obviously assists us again, reach our emissions target. So you can assume really, it's a broad range of initiatives. We're actually relying on each of our destinations to come up with a plan that suits their location best. So there will be a number of different ways that each one of our 42 destinations get to net zero, our aspiration.

Yes, that's good. I appreciate it. As far as your customer foot traffic, how is that actually down? I was just -- I suppose there's always a lingering concern about privacy and profiling of customers passing through Scentre, obviously, not everyone who comes and buy something, some are just in transit.

Yes. So there are a number of ways we count foot traffic. None of them, as far as -- I'll ask Elliott to comment further. But none of them, as far as I'm aware, involve privacy concerns in any way. Notwithstanding that, we understand that privacy is a significant issue, and we're always conscious of the data we collect and ensuring that we are appropriately compliant. But do you want to talk about...

Yes, effectively, it is an aggregation of a number of people coming through as opposed to profiling of the who is coming through for privacy reasons, in particular...

The knowledge involved in counting heads?

It does use various forms of technology in order to improve the accuracy of the measurement of who comes through. You are right. Not everyone that comes in will buy something. But if they don't come in, they're not buying at all. So heads our focus on attracting people to come. And generally, that will involve some form of activity that a person will do. So our job is to drive as many people into our destinations as possible.

Yes. That's great. Yes, I was interested to read about your, what you call -- what do you call it, the things like involving Disney to attract people at a new fancy tool -- just slips me down. I won't look -- don't waste time by looking for it on the paper. Probably not wanting to detract from your main strategy of developing your shopping center as an experience for people to shop, but given the relatively large land holdings and concerns about the housing crisis, I wonder whether there was a potential we've explored the option of possibly partnering with the housing development. So utilizing some of like your carpark space to integrate car parking and housing development on some of the sites.

So as part of our announcement, we did note that we have approximately 670 hectares of unused land adjacent to our centers. And obviously, they are in the most populated places in Australia and New Zealand. So that is a significant growth opportunity for the group, which is something that we are absolutely focused on, conscious of the current environment for housing as one element of that. Do you want to add anything?

Yes. So just -- sorry for correcting, 670 is the title land holding, including the buildings. A substantial part of which is unutilized or underutilized carparks being in form of underutilization, you could argue. Further to Ilana's comments, if you think about the right to play, I suppose, in terms of where the long-term growth opportunity comes from that strategic landholding, it's in 2 forms. One, we know that the populations of both Australia and New Zealand are increasing. We also know that there is a housing supply shortage. And the other component is that our locations are like, hey, they're amongst heavy infrastructure of a public nature, generally transport nodes, areas of densification. So the quality of what can be done on our land holdings in terms of densification is relatively high compared to other groups that have substantial land holdings. And so we're looking at what long-term growth opportunities that might present in order to drive more value for securityholders over, again, a longer-term viewpoint, on top of driving more visitations and business partner sales growth for our core business, which generates a lot of cash flow for securityholders.

I'm going to go to online just to see if there are any questions online.

Yes, Chair. There's a question from Mr. Stephen Mayne. Well done on finishing Knox. What is the realistic time line for the proposed redevelopment of nearby Westfield Doncaster, which city of Manningham approved more than 5 years ago.

Thank you very much for the question, Mr. Mayne. I'm not sure of the answer. I might ask Elliott to answer. Doncaster is not on our plate currently.

Yes. So it does form part of the $4 billion of retail development opportunities. You're right about the approval. I'll also note that the redevelopment of Doncaster occurred, I think, it completed in 2017 or '18, where we added the new entertainment and lifestyle precinct that has gone extremely well, and we're looking at how do we expand that entertainment lifestyle late at night trade offer at Westfield Doncaster. And so I would expect that we would be looking at opportunities of how we commence that probably in late 2025, 2026 would be a time frame that we could think through at this point in time. Obviously, that's subject to change depending on other priorities of the group. But the good thing is that Doncaster continues to perform extremely well. It is one of our premium assets, and we'll continue to deliver growth, both organically from what has been built and what we can add there due to the success of the entertainment and lifestyle and the ability to add more entertainment and lifestyle to that destination.

Are there any other questions online?

No, no, Chair.

Any questions from the phone?

There are no phone questions at this time.

Thank you. So we'll move to microphone 2 in the room.

Allan Golden from the ASA. I've got proxies from 193 securityholders. Just to follow up on the first question there -- the first securityholders question and the response. Firstly, FFO, or funds from operation, it's not just the last 5 years. If you look at since the group has listed, it is below what it was in listings. So we're talking more like 8 years. But the reason for it, as was said by the CEO and has been discussed before, is because of the amount of borrowings that were done during COVID, and it was decided to go that way, which is fine. But there's opportunities to reduce those borrowings. And specifically, you have $20 billion worth of centers that you own 100%. There is the opportunity to sell down those centers. You can sell down to 25% and keep your management rights in perpetuity. Even if you go to 50%, as you have done with some of the others, there is this opportunity that's been sitting there. And I agree, today is not the best time to be looking to go and sell down. But there is that opportunity. What I want to know is, is that opportunity going to be taken to go and reduce the debt levels without affecting your business in any way? So I would just like to know if that will seriously happen when the market conditions are correct, and I haven't. I'll leave the other question really.

Thanks, Mr. Golden. Do you have any others? Or that's it?

No. Look, I was just -- a follow-up on the second question there on the floor, the second securityholder, about the utilization of the 670 hectares. That opportunity, not just for residential, but for retail or not for retail, but for office and a variety of other users, has been there for years. And it's been looked at for years. Again, is that going to be something that is going to be seriously taken into consideration now? So those two.

Thanks, Mr. Golden, and thank you for your engagement prior to the meeting. It's always very constructive. Thank you. So just in relation to the 2 questions. Yes, we are always looking at opportunities, perhaps to joint venture our assets, and it's always a question of the right time and the right opportunity. We're not in a position where we have to do anything. But certainly, it is something that we always consider. Similarly, with utilization of the land, clearly, once you use an asset or sell an asset, you no longer have it. So you have to make sure that the opportunity is the right opportunity, and that's certainly something we are always considering.

What I'm saying is not sell it. I'm saying reduce the ownership level [ since ] you have control of the asset, but you get some money from what is basically something that isn't important to you. The idea of the Scentre is important, but the idea of 100% ownership is not necessary for your business.

Understand. Thank you. Microphone 1.

I'm Paul Fanning, a long-term Scentre Group shareholder, and also going back into the Westfield -- probably back to the 1980s. It's paying a bit historical context. Look, I pick up entirely from the previous securityholders raising issues about debt mode, also performance of the FFO and also distributions, not only over 5 years, but over 10 years and also the share price. I fully endorse previous securityholders' questions. And this probably gets reflected back into the overall share price, which is on a diminishing return. Once upon a time, I and many others here would have thought that Scentre Group was a good income earner and had some cap growth. I don't see that now. Obviously, as Elliott's indicated, and I think you, Ilana, you've indicated, the COVID obviously caused a great reduction in rental income and rental income reduction mandated to fall by 50%. I understand that. I take that. But the debt load is obviously very high. And looking at it from an income perspective, my question for you is, I'll turn to the Board and to Elliott is, when will the distributions get back to what they were either 5 or 10 years ago? But you have this counterplay of very high debt levels and maybe need to be a bit more equity put into shopping centers by bringing in more partners. So I plan to a few scenarios, but really, we probably really need to get an answer. And I think that probably part of the reason why the share price largely is somewhat depressed, particularly after COVID. What can you do?

Thanks, Mr. Fanning. So I think the share price has certainly recovered, and the response after the announcement has been very positive, and we certainly outperformed our sector. So I think that's cause for optimism, first. Second, debt levels are clearly an area of focus for the Board and for management. We're looking at all sorts of opportunities where we can review debt levels and see what's available to us. Obviously, as Mr. Golden said, the opportunity to sell down the percentage of some assets is there, but only at the right time. So -- but you can assume we're considering all those matters that you raised.

And as far as distributions are concerned, going on, do you have any sort of projections because I look at -- what analysts are saying and the distributions are really not really greatly increasing, but the -- was what they were.

So we've given guidance as to what we think the distribution will be for 2024 at 17.2%, which is obviously an increase on last year. But obviously, we're not in a position to say more than that at this point.

All right. I'll probably raise those similar questions again next year.

Okay. I look forward to seeing you. Are there any other questions? Microphone 1?

It's Charles Kingston, K Capital. Just following on from some of the issues, specifically the $4 billion development pipeline, given how many times gearing has been raised, which is high. I was just hoping to get some clarity as to how you will fund that gearing -- that development pipeline? As has also been discussed, you could sell down some assets to potentially pay for that, but I don't believe much in the market is trading. It sounds like now is not a good time. There was an article -- a recent article on the Tea Tree Plaza that could potentially sell or half of that, which you own the other half, at potentially a 20% discount to your valuation or a 7.5% cap rate. Again, could be pure speculation, not sure if that is correct. But clearly, if that is the case, then it might be tough to sell down some assets in line with the current book valuation. So I was just hoping to get some clarity on how you will fund that $4 billion pipeline. And if you could comment on the likelihood of potential sell-downs given there aren't really many transactions out there, and if that 7.5% cap rate or 20% discount for the Tea Tree Plaza is accurate, just appreciate your thoughts.

Thanks very much for your comments, Mr. Kingston. So just on the $4 billion development pipeline, that is over a period of 10 years. So it's quite a long period. And at the moment, we are self-funding. So obviously, everything we do has to go through a rigorous process to ensure that the returns are worthwhile, and that's how we determine the development pipeline over any period of time. And Knox is a good example of where we've shown that the investment -- the return on the investment was positive. And I hear your comments on selling down and agree with you. It's a matter of finding the right time to do that and the right opportunity. Do you want add anything?

No. I think that the point is it's a development pipeline, it's on a committed development pipeline. So at the moment, our committed CapEx, for what we have to spend, is actually quite low in terms of the forecast for the next 12 and even 24 months. So the low on the -- potential low on the balance sheet is not all that great. And therefore, earnings are flowing through at the top line to the bottom line. But the point of the pipeline is that the potential doesn't go away. It's actually when you execute it. And certainly, various forms of capital management have historically been employed. And we have been quite public in saying that the potential to sell down joint venture interest in our assets in the 20 assets is something that is of consideration. I would also note that since the release of our results and many of our peers, it is clear to the investment community more generally that our industry has proven to be quite resilient in terms of its cash flow even through the pandemic and post the pandemic and therefore, interest from potential participants into -- buying into direct shares of -- or direct interest in our centers or other people centers is actually increasing. In respect of what we speculate regarding Tea Tree that is related to our joint venture partner, they -- you probably have to speak with them. But they are in a different position as to a willing buyer and willing seller looking to be opportunistic. They have certain obligations that they have made, which is driving their own objectives, which, the point being doesn't necessarily translate to what a fair market value might be for that potential 50% share speculated to be for sale at this point in time.

Thank you. Should we go online?

Yes, Chair. There's a question from Mr. Stephen Mayne. The property taxes continue to rise, especially in Victoria, which now has the highest land rate -- land tax rates in the country. What is Margaret and the rest of the Board doing to help management and the industry to reverse the trend, which is increasingly seeing property owners as a soft touch for cash-strapped governments. Also, could Elliott comment on whether council rates or land tax is costing us more? And which is rising fastest?

Thanks, Maureen. I think, Stephen, you meant me rather than Margaret, but it's okay, I think. So as a Board, we have lots of issues to consider that relevant to Scentre's business and probably this is not one that currently is on our radar, but I'm conscious of the issue that you raised in a general sense. But maybe I can get Elliott to comment on whether -- on the effect of council rates and land tax.

Yes, thank you. So as part of my responsibility to this, I also sit as the Deputy Chair of the Shopping Center Council, which does, as an industry, look at these issues regarding particularly, I think the rightful comment of us as property owners being seen as an easy target when it comes to potential for revenue raising. There has been discussions or move to changes with land tax, particularly in Queensland as well as Victoria. We have been successful as an industry to mitigate or ameliorate those potential changes. But they obviously are on the radar to keep an eye out for on not being overtaxed relative to what other companies or other industries are paying us their fair share of funding government. So I wouldn't say that council rates and land taxes rising faster than anything else, but it does require vigilance and a lot of proactivity to ensure that we remain fairly treated rather than being unfairly treated.

Are there any other questions in the room? Microphone 1?

Good morning. My name is Sam Schwartzberg, and I'm a very, very long shareholder in the company. I was listening very careful what the people say. The one's saying, let's sell this one. Let's take the partners that one. I didn't see anybody say thank you very much for the Board, which we elected. We will let them run company with talking about debt, we're talking about that one, we're talking about that one. In Sydney, I live in Bondi -- not living in Bondi, I live in Bellevue Hill. But in Sydney, I tell you one thing, my dear friends. When you sell any property, any land, anything, and I know in Sydney, every Westfield around the very valuable land, you're never going to buy it back again. So let me make it clear. You don't need to force Board to serve it to take some partners which good or bad will -- should let them run the company. [ You don't ] asking some questions. We got too much debt. We got this one, we got that one. Let them run the company.

Thank you for your comments. Are there any other questions in the room? Any more online, Maureen?

No, no.

Any on the telephone?

There are no phone questions at this time.

Thank you. So as there are no further questions, I'll now move to Items 2, 3 and 4, which are the reelection of Carolyn Kay, Guy Russo and Margie Seale. The notes accompanying the Notice of Meeting include a background note on each director. The Board, with the directors abstaining in respect of their own nomination, recommends that you vote in favor of each of Carolyn, Guy and Margie. Before I turn to questions, Carolyn, Guy and Margie, each wish to say a few words in support of their reelection. So Carolyn, I invite you to say a few words to the meeting.

Thank you, Chair, and good morning, fellow securityholders. Thank you for the opportunity to address you today and also for allowing me to be considered to continue as a Director of Scentre Group. Scentre Group is a remarkable organization that I'm very proud to be a part of. Each time I walk into one of the 42 Westfield destinations, and I've been in 2 this week, I'm excited and I'm energized. The Board has a broad range of skills now led by a new Chair. We worked together whilst challenging each other to reach, with management, effective outcomes for stakeholders and strengthening of our organization. You may have seen the details of my experience and current roles in the Notice of Meeting. In summary, I've worked for over 30 years in finance as a lawyer, a banker and a nonexecutive director. I have been and am now a nonexecutive director across a broad range of sectors, including logistics, financial services, government, not-for-profit, property and retail. I work continuously to enhance my existing skills and experience, and I'm a great believer in formal education where I have engaged on a broad range of subjects, and also informal but deliberate education. For instance, when I travel, whatever the main purpose of the trip, I seek out relevant offerings, destinations and learnings to consider in the context of Scentre Group. I believe that my background in law and finance, coupled with my experience as a nonexecutive director and my ongoing education, provides me with the relevant skills for this role. I take my responsibilities very seriously, and it is with a commitment to work diligently for you that I offer myself for reelection to the Board of Scentre Group. Thank you very much.

Thanks, Carolyn. Before moving to discussion, I'd like to disclose the proxy results for the resolution. The results appear on the screen. Now if anyone wishes to ask a question in relation to Carolyn's reelection, please do so now. Mr. Kingston?

Thank you. Look, Carolyn, you've obviously got a great CV. It's good to have high-quality people like yourself on the Board. But I come back to the issue I tabled in my first commentary. Over the last 5 years, the key metrics have fallen by 12% to 25%. Now that's a large fall. If you then take into account that, that's not inflation-adjusted, the fall is even larger. And I'd appreciate your thoughts given your excellent experience, Carolyn, as to what's really driving it? Is it that malls are struggling? Clearly, America is a different ball game. Malls are very, very different over there. But here you have these iconic malls. With the financial performance, and you got a lot of that, has been poor over the 5-year period, there's no avoiding that conclusion. So just appreciate your guidance as to why you think over 5 years, not 1 year, not 2 years, 5 years, the key financial metrics have fallen. At the end of the day, securityholders are looking for total shareholder return, they're looking for capital gain and income. This company has distributed income, but relative to Frank Lowy's sale at $4 5 years ago, it's distributed a capital loss. Appreciate your thoughts. Thanks.

Thanks, Mr. Kingston. I think we've answered the question as best we can. But Carolyn, if you'd like to add anything.

Thank you, Chair. I think -- thank you, Mr. Kingston. You've already heard the Chair's and the CEO's perspective on these topics. And my response would be very consistent with the responses that have already been given.

Thank you. Microphone 2?

Thank you. We'll be -- Ms. Kay, we'll be voting our undirected proxies for your reelection. But as you've been on the Board for 8 years, we're wondering if you believe that this will be your last term?

Can I respond, Mr. Golden?

Sure.

So Carolyn is standing reelection, but obviously, succession planning is a very important aspect of what the Board undertakes. Obviously, we haven't made announcements of last terms -- or not last terms, but you can assume that we are planning for succession, and that would include planning for Carolyn departing the Board and ensuring that we can replace her skills.

Okay. That's fine.

Thank you. Ms. Li?

Thank you. Not a question specifically for Carolyn, but I appreciate that you've got good gender diversity on the Board. But I just want to reiterate, as I do with all the Boards, I have 6 Boards, there is a need for greater diversity in other forms, and I'd ask that the Board be mindful of that. And succession planning, as you will be aware, of that Boards, which better reflect for community generally perform better, and it might reinforce or assist with some of the other comments about the overall long-term performance, without specifically being critical of you guys. The other thing is that companies which have holdings, particularly in the U.K., report on other forms of diversity, whereas -- and that would be useful for you to make that disclosure if -- for your consideration.

Thank you, Ms. Li. Yes, we agree that Board should reflect our customers and our communities. And so diversity is incredibly important. And yes, we will consider, whether we have better or more broader disclosures around diversity. Online?

There's a question from Mr. Stephen Mayne. Could Carolyn and the Chair both comment on whether they would support a corporate name change to Westfield Australasia? It was Frank Lowy who insisted on the use of the name Scentre Group. He is no longer on the Board. And as David Kingston pointed out, has sold all his shares. It doesn't make sense to not use Westfield in our corporate name. Is there anything stopping us from changing our name to Westfield Australasia? Why not just do it?

Thanks very much, Mr. Mayne. This isn't something that we, as a Board, have considered simply because the name Westfield is such a strong brand in the community, it really hasn't been necessary to consider whether we should change the name of Scentre. And in fact, since Scentre's establishment in 2014, it has managed to create its own brand and own separate identity from Westfield. And in fact, I think it would be, at this point, probably an unnecessary change expense and undertaking when there's lots of other things to do, but happy to...

Yes. The other point I'd make is that the Westfield brand name is actually owned by Unibail-Rodamco-Westfield, we utilize that name, and this was articulated in the prospectus that launched Scentre Group in 2014 under a license arrangement, our perpetual license arrangement, which allows us to use the Westfield brand name for our business, primarily at the shopping center and destination level in both Australia and New Zealand. So the ability for us to change the corporate name, notwithstanding what Ilana say where our focus is, would not be permitted under the current license arrangements that -- with Unibail-Rodamco.

Thanks, Elliott. Are there any other questions in the room? No? Any questions online, Maureen?

There are no other questions.

Any telephone questions?

There are no phone questions at this time.

Thank you. So there seems to be no further questions. Based on the indicative results, it appears that Item 2 is passed by the requisite majority. Congratulations to Carolyn. Guy, I invite you to say a few words to the meeting.

Thank you, Chair, and good morning, everyone. My name is Guy Russo, and I was honored to be elected as a Director of the Scentre Group in 2021. I'm very pleased to offer myself for reelection to the Board today, and thank you for the opportunity to address you. Over the course of my career, I've gained extensive experience in the local and international retail industry, including my role as CEO of McDonald's Australia, President of McDonald's Greater China, followed by my role as a Managing Director of Kmart Australia and New Zealand, and then CEO of Wesfarmers Department Stores, Kmart and Target. In addition to my directorship at Scentre Group, I am Chairman of Guzman Y Gomez, Chair of SomnoMed and the Chair of OneSky, an international charity for children living in poverty in Asia or that are left behind. Scentre Group is an outstanding organization, and I am proud to be a Director. I'm also proud of the important role that the group plays in our communication in the lives of our customers. Growing up, my local Westfield was Burwood in Sydney. And today, my local Westfield is Southland in Melbourne. Over the years, as both a business partner and a customer, I've watched our centers evolve into our Westfield destinations. I believe that the group's purpose, strategy, the quality of our destinations and the experience and commitment of both the management team and the Board sets this business apart from many others. If reelected, I have the time, the focus and commitment to work with the Board and its management for the continued success of the group and for you, our securityholders. Thank you for your consideration.

Thanks, Guy. Before moving to discussion, I'd 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 Guy's reelection, can you do so? Yes, Mr. Kingston?

Look, I'm slightly disappointed, Carolyn, didn't respond to my question, but I accept your response, Carolyn. Guy, you are the person on the Board with the most direct retail experience. So it's fantastic to have someone of your credentials on the Board. The real issue about our Scentre is its underperformance over 5 years. I'd be grateful if you could give us your retail-oriented insights -- Elliott has, but if you, as a fellow director, could also give us clarification. Our malls are dinosaurs. Is that part of the reason Scentre has underperformed over 5 years? Or the fact that Australia is so concentrated population growth, the iconic nature of the Westfield centers, does that mean that the Scentre facilities and the FFO performance per share, the distribution per share, can regain the level it was at 5 years ago? The stock price can regain the level at which Frank Lowy sold? Or are malls fundamentally a little bit structurally impaired by virtue of operating costs going up, rents potentially as a percentage of sales going down? You are the retail expert, in addition to Elliott, grateful for your commentary because it's the critical issue because the overall return of this company hasn't been good over 5 years. Thank you.

Thanks, Mr. Kingston. Guy, would you like to say some more words in response?

I think -- I don't want to talk about the past 5 years. You've articulated your questions well that we've all heard them, and I do endorse Elliott and the Chair's response. I couldn't be more excited about the 42 centers that we've got here in Australia. I wouldn't use the word dinosaur. If I was a competitor or somebody trying to enter into this market, I think we've got the jewel in the crown. What's happened in the past 5 years in the way that the Chair and the CEO have articulated, I agree with, but I think this is probably one of the most exciting areas of land that have got the most productive retailers inside them to be able to be beneficial to securityholders and our customers. I just look at the landscape that we've gotten, I can't think of anything more beneficial if you are investing in a retail then to invest in Scentre. It's an exciting opportunity. I love the way that you've just said, forget COVID. I wish we could. It was significant. But I think the future is exciting for Westfield. So just go into one of our centers. I just feel like we've got 42 Disneylands sitting here in Australia. And the focus of this management team is share price. Maybe that's the one word that you haven't heard. We are all very focused on bringing that share price up significantly over the next period of time.

Thanks, Guy. Thank you. Online?

There is a question from Stephen Mayne. Coles and Woolworths are currently copying a lot of criticism for their alleged abuse of market power. They pay us more rent than any other company. As a former CEO of Kmart and Tuggerah, could candidate Guy Russo comment on whether he believes there is a case for breaking up Coles and Woolworths? Could our CEO also please comment on whether there is a power imbalance when Coles or Woolworths negotiate lease terms with our company? How does he find dealing with them? And what does he think of the current debate, including fourth divestiture legislation currently in the Federal Parliament?

Thank you very much, Maureen. Obviously, there's a broader conversation going on in Australia today about supermarkets. They are a very important business partner of ours, and I'll let Elliott talk a little more about our relationship with them. I'm not sure that it's relevant to today's meeting to ask Guy to comment on issues to do with Coles and Woolworths, so I won't put that question to him, but perhaps Elliott, you might like to talk about negotiating with Coles and Woolworths.

Yes. Thank you. And I'll also echo that they are a very important business partner. They are -- combined, they do drive a lot of sales and visitation to our destinations. So they are important. I would say that our relationship is actually quite strong with both groups. And it recognizes on both sides the importance that we play for each other in driving both their sales, but also visitations to our destination. So I wouldn't -- so there's an imbalance in the negotiation. But I would say that there's a mutual respect for one another and the value that each group brings to each other's business in how we negotiate and renegotiate renewals when they do arise, and they are commercial discussions, and we seek the best terms and they seek the best terms.

Thanks, Elliott. So there seems to be no further questions. So based on the indicative results, it appears that Item 3 is passed by the requisite majority. So congratulations, Guy. Thank you. So Margie, I invite you to say a few words to the meeting.

Thank you, Chair, and good morning, everybody, and thank you for the opportunity to say a few words about myself and why I'm standing for reelection for Scentre Group today. I currently work on Boards across public, private and not-for-profit organizations. Additionally, I mentor senior business leaders globally. I sit on a range of Board committees across those organizations, and as of the 1st of April this year, have taken on the role of Chair of the New Risk and Sustainability Committee at Scentre Group. This committee will play an important role in assisting the company to meet its sustainability targets as noted in the various reports recently published and allow the Board to focus even more closely on risk. My background includes experience at senior executive level in customer, digital, people, strategic and business development and brand. And now with over 10 years of nonexecutive director experience under my belt, I've seen companies go through various iterations of development and leadership change. It's been a delight to see the transition to Elliott and his team go so smoothly and watch them aspire to new heights. It's a highly capable team, which seeks always to achieve great things. Across my career, I spent a lot of time in our centers and the group's successful strategy over recent years to move from focusing solely on retail business partners to increasingly building broader community and consumer engagement across the platform has been great to see. As a Board, along with the management team, we constantly think about what Scentre Group will look like in 5 to 10 years and how we can best serve the company to get there, ultimately, with the desire to build the business to grow securityholder returns. Last time I stood for reelection, we've just been through a very difficult period for the world and the community. You can see from the results that Scentre Group has performed strongly and continues to deliver a premium product for both business partners and consumers. I continue to support the hard-working teams in our centers and look forward to the company also continuing to excel. It is a great pleasure that I stand for reelection today. Thank you very much.

Thanks, Margie. Before moving to discussion, I'd like to disclose the proxy results for the resolution. The results appear on the screen. If anyone wishes to ask a question in relation to Margie's reelection, please do so now. Mr. Kingston?

Great to have another high-quality director. We will support your reappointment. But just I'd appreciate your clarification, Margie, on a key issue. In essence, the company has shareholders' funds of $18 billion. It has a market cap of $17 billion. It has senior debt of $11.5 billion. It has sub debt of $4 billion. We've heard today from Elliott that the sub debt will be redeemed at the reset dates to avoid handily interest effectively going up to 9%. So there's $4 billion that's going to be needed between 2026 and 2030. Also heard today that Chair clarify, the $4 billion development pipeline is phased over a 10-year period. But Margie, the bottom line is that the company is going to need to find a very small amount of money, $8 billion, which is a lot in the context of an $18 billion shareholders' funds and $17 billion market cap. Could you perhaps clarify your views on how the company is going to find that $8 billion? Thank you.

Mr. Kingston, can you direct questions for me, as Chair?

Yes, Chair.

Thank you very much.

I thought because that Margie is up for reelection that it's appropriate for her to answer.

Thank you. So can I just -- what's very clear is that we agree on a number of things, which is the value of the assets. And we also agree, I think, on our aspirations for the organization. Perhaps where we might not agree is on the impact of the circumstances that we've been through over the last number of years and the period of time it might take to recover. But I'd like to think that our aspirations are exactly the same with the organization. But maybe if I can ask Margie, if she would like to comment at all or add anything?

Thank you, Mr. Kingston, for your question and all the questions you've asked today. I don't have that particular answer to your question then, but what I think we are looking to do is to work with the management team and the CFO and CEO to examine our debt position and, of course, with the whole management team to achieve our aspiration for growth. We have, as Guy said, 42 fantastic centers and an excellent management team. The last 5 year results have not been potentially what we might have asked for, but circumstances were such that we delivered the best we could in those circumstances. And we always look for opportunity to both make sure our debt levels are as they should be, and in fact, our growth is as it should be as well.

Thank you, Margie. Are there any other questions in the room? Online?

There are no questions.

Sure. Elliott, you want to add something?

I did want to clarify. In my comments, I think you may have interpreted that we are redeeming those sub notes. It's our intention to redeem those sub notes when they do mature. So I want to clarify that. And I also wanted to point out that there are a number of options that are available to us at that point in time, which might include actually reissuing new sub notes to replace the existing sub notes. So in terms of the maturity profile, it is something that we actively manage, whether it be debt, whether it be sub notes, whether it be retained earnings, whether it be the level of top line income that we push to achieve, but it is something that we have between now and 2026 at the earliest to have to think through, and we believe that's sufficient amount of time for us to have a capital management plan in place as we have done, which protects shareholder value versus potentially what happened with a number of other peers issuing highly dilutive equity at a very low point of the COVID cycle, which did occur in a number of our AREIT peers.

There seems to be no further questions. Based on the indicative results, it appears that Item 4 is passed by the requisite majority. So congratulations to you, Margie. Before moving to the discussion on the remuneration report, I'd like to disclose the proxy results for this resolution. The results appear on the screen behind me. As I noted earlier in the meeting, we expect to fall short of the required threshold of 75% by a narrow margin. We welcome and highly value feedback from securityholders and other key stakeholders, and we'll certainly take these views into account before we come back to you next year with our remuneration report. The remuneration report sets out the remuneration policies and arrangements in place for directors and certain senior executives. Our executive key management personnel, whose remuneration arrangements are required by law to be disclosed for the year ended December 31, 2023. I'd be happy to answer any questions that you might have. Are there any questions? Microphone 2. Mr. Golden?

That happens when you get to be sold. ASA is actually going to be voting for this remuneration report, as you know, with reservations, which we've said, and I'd like to speak about some of those. But can you tell me why there's such a big against vote? Obviously, you've heard from the proxy advisers who are pushing for that?

Yes. So thanks, Mr. Golden. So obviously, most investors were supportive of our remuneration report. And there was general acknowledgment that we'd paid for performance. And the market reaction would seem to indicate that was the case. And obviously, every discussion we've had is different. But if I had to summarize the 3 questions that we received, they would go -- they would be these. The first was in relation to our short-term incentive targets, particularly for FFO and distribution, were they tough enough? The second was in relation to our long-term incentives and specifically the ROCE, the ROCE measure. And the question there was the threshold at which we paid 50% of the ROCE element. Was that tough enough? And the third question was, was it appropriate to increase the fixed remuneration for Elliott, Andrew and Maria? Obviously, from what we've written in the remuneration report, our view on all those -- or our answers to all those questions was yes, and we've explained why in the remuneration report. But we understand there are judgments involved here, and that people have different views, and we will certainly be listening to those in future.

Okay. Because my -- and as you know, I have the same reservations on those first 2 points. When we see 90% 2 years in a row on a short-term incentive, which means that we have -- the current CEO's fixed pay was [ 1.8. ] With that, it jumps to [ 3.9 ] When you start seeing 90% coming, you have to ask, are they -- are the criteria hard enough? Are the target -- sorry, the target is too soft. And the same sort of thing with the ROCE, we find the same thing. We also questioned the third one, which is on the comparative -- the 30% of the long-term incentive, which is the comparative to the selected 6 other REITs. The fact that you only have to be average to get 50%. You don't want to be average. The securityholders don't want you to be average. We want to see greater performance. And that's what they're looking to reward. So as I said, we're voting this year. We have said that we won't be voting for it next year unless we see the changes.

Thank you, Mr. Golden. Thank you. Any questions online?

Yes, Chair, Mr. Stephen Mayne. Which of the 5 main proxy advisers, [ Axie ], Ownership Matters, Glass Lewis, ISS and ASA, recommend a vote against the rem items today? Is this our biggest rem protest vote? And what changes are we going to make as a result?

I'm not sure if we're in a position to disclose who's voted against or who voted for. But having said that, I think I've said, well, I'm not -- I don't think this is our biggest rem protest vote. I think there was another protest vote, I remember about 4 years ago. I think I've set out what changes we're going to make, where, as I said, there's a number of different views that we've heard. If this vote, and we'll obviously get the results of the poll at the end of the meeting. But in any event, we will be consulting with our securityholders quite obviously, to find out and to work through what refinements we need to make to our remuneration practices. Do we have any questions in the room? Mr. Kingston?

Just a quick one, Chair. $2 million base salary. 130% is the maximum short-term. 175% maximum long term. If Elliott delivers on those, the total is $8 million. Can you just clarify, how does that benchmark against Stockland, GPT, Dexus, Mirvac?

So we benchmark our executive salaries against a benchmark of top 50 ASX entities. So that's how we benchmark our pay. We obviously also take into account where we sit vis-a-vis our peers. So I think Elliott is very well paid compared to his peers, well paid. Compared to the top 50 benchmarks, excluding miners and banks, he's paid at the new salary between median and 75th percentile, whereas previously, he was below benchmark, below median on the previous package. So the Board decided -- so just to be clear about this process. So when Elliott was appointed, he was appointed on a remuneration package, including fixed remuneration which was below P50, below the 50th percentile. On the basis for that was he was untested in the role. After -- and that remuneration was set approximately 2 years ago. The Board, having considered his performance in the role and what the organization had achieved, thought it was appropriate that he be paid $2 million per annum as fixed remuneration, understanding that when Peter Allen, our previous CEO left, he was also on $2 million, and that has not changed since the company was established in 2014. Are there any other questions? Okay. There seems to be no further questions. The final results of the poll will be announced to the ASX later today. I now move to Item 6, the approval of the grant of performance rights to Elliott Rusanow, our Managing Director and CEO. As outlined in the group's remuneration report and the notice of meeting, performance rights form part of Elliott's at-risk short-term and long-term variable remuneration. This proposal to grant performance rights to Elliott for 2024 is consistent with the group's remuneration framework. The Board, with Elliott abstaining, recommends you vote in favor of this resolution. Before moving to discussion, I'd 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, can you please do so now? Are there any questions in the room? Online? I think there's one, right?

Yes, I beg your pardon. A question, Chair, from Stephen Mayne. Why was there a big protest vote against this incentive grant resolution but not the remuneration report? Which proxy advisers caused this? And why didn't they also oppose the rem report as opposed to just the LTI grant? Also, could the CEO summarize his past LTI grants as to whether they have vested or lapsed? Please don't say look it up in the annual report and through ASX announcements, it's complicated, and the CEO could factually summarize the situation in 60 seconds.

Thanks, Mr. Mayne. So I think the vote against this resolution and the previous rem report resolution was similar. So I'm not quite sure about the first question. I said I'm not in a position to tell you which proxy advisers voted for or against. As to Elliott summarizing his past LTI grants, I am going to tell you to look at the remuneration report. I haven't got it in front of me. It's on one page, and it's very simple to read, and it will be much quicker than 60 seconds. I don't know. I just really -- it's the reason why it's in the rem report, and we don't have to commit all those figures to memory. So thank you. Are there any other questions? Are there any questions on the phone?

There are no phone questions at this time.

Thank you. So there are no further questions on this item. Based on the indicative results, it appears Item 6 has been passed by the requisite majority. So I now turn to Items 7, 8, 9 and 10, which are a series of amendments to the constitutions of Scentre Group Limited, Scentre Group Trust 1, Scentre Group Trust 2, and Scentre Group Trust 3, which together form Scentre Group. The amendments are outlined in the notice of meeting. I have with me copies of each amended constitution, which I've signed for the purposes of identification, and then are tabled at the meeting. While each of these items are separate resolutions, given the nature of the proposed amendments, so I'd like to address any questions as part of one discussion. The Board recommends you vote in favor of the resolutions as the Items 7, 8, 9 and 10. Before moving to discussion, I'd like to disclose the proxy results for each of the resolutions, which can now be seen on the screen. If anyone wishes to ask a question in relation to these resolutions, could they do so now.

There is a question online from Mr. Stephen Mayne, which I'm not quite sure is relevant to the constitution. But 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? What was the experience like from your end? Also, when disclosing the outcome of voting on all resolutions today, could you please advise the ASX how many shareholders voted for and against each item, similar to what happens with the scheme of arrangement. This will provide a better gauge of retail shareholder sentiment on all resolutions. And was a voluntary disclosure initiative adopted by the likes of Metcash, LTM, AUI, Dexus, Webjet, Tabcorp, Myer, ASX and Qantas over the past 3 years, you've got the data, so why not let the sun shine in.

Thank you, Mr. Mayne. So yes, we offered shareholders a hybrid AGM this year because we absolutely do believe in encouraging and offering shareholder participation across all channels. As to future years, it's really a matter of what -- not shareholders -- what securityholders find the most effective way to participate in the company and the business of the company. And if that's a hybrid AGM, we will pursue that. In terms of the experience from our end, it requires quite a lot of logistics and management. It's fine for me, but it is quite a complicated exercise to organize a hybrid AGM. In terms of disclosure of voting, I think we will consider whether or not we disclose shareholders voting for and against. So thank you for the suggestion. Are there any other questions? Anything from the phone?

There are no phone questions at this time.

Thank you. So as there are no further questions on these items, based on the indicative results, it appears these resolutions have been passed by the requisite majority. Could you please cast any final votes before I close the polls for Items 2 to 10, which I'll do shortly. If you voted in person using a card, raise your hand so that it can be collected from you. [Voting]

The polls for the resolutions for Items 2 to 10 are now closed. The final results of the polls will be announced to the ASX later today. So 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 who are 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.