Federation Centres has bounced back from its years of debt and court action with a new focus on food that has seen it report sales growth of 2.4 per cent for the three months to March 31.
The group, which was Centro Properties, said overall annual sales growth increased from 2 per cent as at December 31, 2012, with specialty retailers continuing a positive trend to show annual sales growth of 2.5 per cent.
The growth was higher than the Australian operations of Westfield over the same period and reflects that food retailing was becoming the more-prized tenant.
Analysts said the results were solid and a testament to the turnaround the management, led by Steven Sewell, had been pursuing since the old Centro name disappeared.
Since Mr Sewell's appointment, about 18 months ago, Federation has sold assets, including its headquarters at The Glen in Melbourne, realigned older ones and led a charge to get more food-based tenants. The group also settled a shareholder class action.
According to chief operating officer Mark Wilson, for the nine months to the end of March 31, 602 lease transactions were completed in the owned and managed Federation portfolio.
He said renewals represented about 79.2 per cent (by income) and new leases represented the balance, with the specialty retention rate remaining strong at about 80 per cent. Rental growth across all transactions averaged 2.7 per cent for the period, with renewals delivering 4.4 per cent.
"The Federation portfolio continues to record an increase in annual sales growth underpinned by the supermarket and specialty categories, which represent approximately 75 per cent of Federation's total sales volume," he said.
"Within the specialty retailers categories, telecommunications and retail services continued to achieve solid growth and there were meaningful signs of improvement within the apparel and footwear categories."
According to Goldman Sachs analyst Simon Wheatley, retail sales growth across all landlords remains challenged.