A major shopping centre owner has raised its guidance as its portfolio slowly bounces back from the collapse of the women's fashion retailer that operated the Noni B, Rivers and Katies brands.
Region Group, which owns 87 neighbourhood and sub-regional shopping centres across Australia, has yet to fully lease all the shops left vacant after Mosaic Brands shuttered its 700 retail stores in late 2024 and early 2025.
"We've got about 85 per cent either leased or casually let, where it's earning some sort of income," chief financial officer David Salmon told analysts on a conference call on Tuesday.
"Obviously, we're looking to fully lease everything, but there is a little bit of a drag in terms of dollars on the NOI (net operating income) line," he said.
Region Group had a portfolio occupancy of 97.7 per cent as of December 31, up from 97.5 per cent at June 2025.
Excluding its anchor tenants, which are mostly Coles and Woolworth supermarkets, its vacancies rate fell to 4.5 per cent, an improvement from 5.4 per cent six months ago.
Region Group has had to offer more leasing incentives to fill those vacancies, but - unlike in past years - it isn't concerned about the financial health of its tenants.
'You've got the Reject Shop, that have been taken over by an enormous discount retailer from Canada - (they) are doing a tremendous job, they want to expand, so they're looking really positive," CEO Anthony Mellowes said, referring to Canada's Dollarama.
Chemist Warehouse was also doing well, he added.
"So we don't have any portfolio of tenants that we're sitting there going 'we've got a big watch on them', like we had in the past," he said.
"There will be some that come up, that's just natural, but there's nothing there at the present in those mini-majors."
Mr Mellowes, who is retiring in March after 14 years with the company, said he didn't believe a recent rise in interest rates would have much impact on retail sales for its tenants, because of Region Group's high focus in the non-discretionary sector.
For the half-year to December 31, Region Group turned a statutory net profit of $180 million, up 120 per cent from a year ago, although much of that boost was due to an increase in the fair value of its investment properties.
Adjusted funds from operations, a key financial metric used to evaluate the performance of property groups, rose 3.0 per cent to 6.9 cents per security.
Region Group upgraded its full-year earnings guidance to 14.1 cents per security, up from 14 cents.
By lunchtime, Region Group stapled securities were up 3.5 per cent to a three-week high of $2.40.
