Unibail-Rodamco-Westfield: Financial information as at September
30, 2021
Paris, Amsterdam, October 27, 2021
Press release
Financial information as at
September 30,
2021
- Reopening in
Continental Europe drives
continued
recovery, demonstrated
by tenant sales at Cont.
European centres
+6% vs. 2020
or 92% of 2019 levels and
footfall at 80%
of 2019 levels in Q3
- US recovery
accelerating, with tenant sales at
102% of 2019 levels in Q3,
and non-CBD Flagship centres higher
at 108%
- Sustained
leasing activity with
518 deals in Q3,
bringing the total YTD
to 1,736 deals,
+23% vs. 2020 and back
to 2019 levels;
new rents on Continental European deals
YTD close to passing rents
- Rent collection
improved to
88% for
Q3, up from
78% for
Q1 and
80% for
Q2
- Overall vacancy
levels improved in
Q3 to
7.9% (vs. 8.3% at FY-20 and
8.9% at
H1-2021)
- Strong vacancy improvement
in the US from 14.0% to 11.8% with
vacancy also
down in Continental
Europe at 4.9%
(vs.
5.0% at
H1-2021)
and in the UK at
11.8% (vs.
12.2%)
- Continued streamlining of
US portfolio, including disposal
of Palisade for a premium to GMV
- FY-2021 Adjusted Recurring
Earnings per Share expected to be at least
€6.75, slightly above
2020, adjusted for
disposals
Commenting on the 9M-2021, Jean-Marie Tritant,
Chief Executive Officer said:
“Since the reopening of all of our centres and despite
some ongoing restrictions, we have seen a marked recovery in
activity in Q3. Overall tenant sales for Continental Europe reached
92% of pre-COVID levels in the quarter and 89% including the UK,
while the US is even stronger at 102%. This return of activity has
supported a major improvement in rent collection, sustained letting
activity, and a decrease in vacancy levels.
URW also further progressed the Group’s streamlining of its US
portfolio, including the disposal of the Palisade residential
asset. In Europe, we have now reached €1.8 Bn of the €4.0 Bn
disposal programme target.
Considering the positive momentum in Q3, the gradual lifting of
restrictions, and the ongoing progress of vaccination programmes in
our regions, the Group expects Q4 to reflect a continued return
towards more normal levels of pre-COVID activity, allowing our
tenants to capture the key holiday trading period.
With visibility for the remainder of the year now improved, URW
expects full year Adjusted Recurring Earnings of at least €6.75 per
share, slightly above 2020, adjusted for disposals.
We will present a longer-term vision to the market at an
Investor Day planned on March 30, 2022, focused on delivering
sustainable growth from our core portfolio of high quality assets
in the best locations and the unique audience attracted by our
centres, comprising over one billion visits each year.”
1. Turnover
The proportionate turnover of URW for the first
nine months of 2021 amounted to €1,981 Mn, down by -16.5%
year-on-year, predominantly reflecting the impact of the COVID-19
crisis, particularly the restrictions applied in the first half,
and the impact of disposals.
Turnover |
|
IFRS |
Proportionate1 |
YTD in € Mn, excluding VAT |
9M-2021 |
9M-2020 |
Change |
9M-2021 |
9M-2020 |
Change |
Shopping Centres |
1,248.6 |
1,417.2 |
-11.9% |
1,611.9 |
1,874.0 |
-14.0% |
Offices &
Others |
50.9 |
71.3 |
-28.7% |
57.9 |
77.8 |
-25.6% |
Convention
& Exhibition |
70.5 |
95.3 |
-26.0% |
71.0 |
95.8 |
-26.0% |
Rental income |
53.3 |
69.5 |
-23.3% |
53.8 |
70.0 |
-23.2% |
Services |
17.2 |
25.8 |
-33.5% |
17.2 |
25.8 |
-33.5% |
Property
services and other activities revenues |
96.2 |
111.5 |
-13.7% |
96.2 |
111.5 |
-13.7% |
Property development and project management revenues |
144.3 |
212.8 |
-32.2% |
144.3 |
212.8 |
-32.2% |
Total |
1,610.4 |
1,908.1 |
-15.6% |
1,981.2 |
2,372.0 |
-16.5% |
Figures may not add up due to rounding
2. Gross Rental Income
Gross Rental Income (“GRI”) includes the rent
relief given and increased vacancy impact as a result of various
COVID-19 restrictions, particularly during the first half, while
doubtful debtor provisions are part of the property operating
expenses. In comparison, in 2020, COVID related rent relief was
largely booked in Q4.
The proportionate GRI of the Shopping Centre
division amounted to €1,612 Mn for the nine months to September 30,
2021, a decrease of -14.0% (vs. -21.9% in H1-2021, due to strict
restrictions in the first half).
The largest negative impact was recorded in
Germany (-28.9%), as a result of longer and more impactful COVID
restrictions in the first half, and in France (-25.8%), driven by
the disposal of five French assets in 20202. The regions with
negative performance were partly offset by Austria (+16.2%), where
service charges billed to tenants are now recorded in gross income
with a neutral NRI impact, and The Netherlands (+14.5%), driven by
contribution from the opening of Westfield Mall of the
Netherlands.
The GRI of the Offices & Others division was
€57.9 Mn, down by -25.6% compared to 9M-2020, as expected following
the disposals of Novotel Lyon Confluence in 2020 as well as SHiFT
and Les Villages 3, 4 and 6 in 2021.
The GRI of the Convention & Exhibition
division decreased by -23.2% to €53.8 Mn, a sequential improvement
on the -48.1% recorded in H1-2021, due to the restrictions on
events which applied for much of the first half of the year, only
partly offset by a resumption of activity in the second half.
Gross Rental Income |
|
IFRS |
Proportionate3 |
YTD in € Mn, excluding VAT |
9M-2021 |
9M-2020 |
Change |
9M-2021 |
9M-2020 |
Change |
Shopping Centres |
1,248.6 |
1,417.2 |
-11.9% |
1,611.9 |
1,874.0 |
-14.0% |
France |
354.8 |
478.6 |
-25.9% |
359.8 |
484.9 |
-25.8% |
United States |
305.8 |
302.9 |
+1.0% |
572.2 |
649.7 |
-11.9% |
Central Europe |
133.2 |
153.8 |
-13.4% |
143.2 |
159.3 |
-10.1% |
Spain |
106.5 |
122.2 |
-12.8% |
106.8 |
122.5 |
-12.8% |
Nordics |
90.3 |
95.5 |
-5.5% |
90.3 |
95.5 |
-5.5% |
Austria |
79.8 |
68.7 |
+16.2% |
79.8 |
68.7 |
+16.2% |
United Kingdom |
64.3 |
70.1 |
-8.2% |
121.5 |
130.4 |
-6.8% |
Germany |
54.5 |
73.6 |
-25.9% |
79.1 |
111.3 |
-28.9% |
The Netherlands |
59.2 |
51.7 |
+14.5% |
59.2 |
51.7 |
+14.5% |
Offices
& Others |
50.9 |
71.3 |
-28.7% |
57.9 |
77.8 |
-25.6% |
France |
27.9 |
47.0 |
-40.8% |
27.9 |
47.0 |
-40.8% |
Other countries |
23.0 |
24.3 |
-5.2% |
30.0 |
30.8 |
-2.5% |
Convention & Exhibition |
53.3 |
69.5 |
-23.3% |
53.8 |
70.0 |
-23.2% |
Total |
1,352.8 |
1,558.0 |
-13.2% |
1,723.6 |
2,021.8 |
-14.8% |
Figures may not add up due to rounding.
Major events
1. Update on the
COVID-19 situation Since June, all of the Group’s centres
have been allowed to open in all regions, with all sectors
including on-site F&B also reopening. No further full lockdowns
have been imposed in any region, though some restrictions continued
to apply, such as some capacity limits, in particular in Spain, or
“sanitary pass” requirements. Some jurisdictions (the UK, Los
Angeles and New York) have also retained their moratoria on tenant
evictions.
In France, as of July, customers at restaurants,
bars, and entertainment & fitness venues, have been required to
show proof of vaccination or a negative COVID test (“COVID pass”)
to gain entry (similar to rules also adopted in Czech Republic,
Slovakia and Denmark). In August, this was extended to include the
need to show the COVID pass to enter a number of the Group’s French
shopping centres. These measures affected eight of URW’s shopping
centres for a few weeks. No shopping centre has been subject to
this requirement since September 10.
In the US, a broadly similar COVID pass measure
comes into effect in Los Angeles as of November 4, however the
Group expects a limited impact since it is anticipated to only
apply to indoor centres (as well as fitness / F&B /
entertainment venues within all centres).
2. Footfall &
SalesIn Europe, the Group has seen a positive evolution of
activity, with most regions exceeding 80% of 2019 footfall levels
in Q3 (on a same shopping centre basis), and overall European
footfall for the quarter at 79% of Q3-2019, including Continental
Europe at 80% and the UK at 75%.
In the US, regardless of centres having been
open throughout the year, footfall remains slightly lower at 76% of
the Q3-2019 level, partly impacted by centrally located properties
such as Westfield San Francisco Centre, and partly due to shoppers
continuing to favour less frequent, more targeted visits.
The Group’s Continental European tenant sales
achieved 92% of 2019 levels in Q3, outperforming footfall by 12%,
and were +6.4% above Q3-2020. The UK saw a strong improvement from
72% to 80% of 2019 levels between June and Q3, and to 83% in
September, as work from home has gradually decreased. In the US,
recovery has been more advanced as the centres have been open for
longer, with tenant sales exceeding pre-COVID levels during Q3 at
102% of 2019. Tenant sales for the non-Central Business District
Flagship centres4 continue to outperform, reaching 108% of 2019
levels.
|
Footfall5 |
Tenant sales6 |
as % of 2019 levels |
Jun-21 |
Q3-2021 (Jul-Sep) |
Jun-21 |
Q3-2021 (Jul-Sep) |
France |
78.9% |
81.0% |
90.0% |
91.2% |
Spain |
78.2% |
79.4% |
85.3% |
85.6% |
Central Europe |
74.2% |
77.4% |
92.4% |
97.7% |
Austria |
82.8% |
84.6% |
86.8% |
90.5% |
Nordics |
79.1% |
82.9% |
90.9% |
94.3% |
The Netherlands |
67.4% |
68.7% |
NA |
NA |
Germany |
77.1% |
80.2% |
86.5% |
90.1% |
Continental Europe |
77.5% |
79.8% |
89.2% |
91.6% |
United Kingdom |
67.8% |
75.2% |
71.6% |
80.1% |
Europe |
76.3% |
79.2% |
86.1% |
89.5% |
US |
75.4% |
76.3% |
99.5% |
102.1% |
Total Group |
76.0% |
78.6% |
89.9% |
93.1% |
For the overall Q3 period, the top performing
categories in Europe compared to 2019 were Jewellery (+1.1%), Sport
(-1.5%), Home (-4.0%) and Health and Beauty (-4.1%). Both Food
& Beverage Services (-13.3% vs. -21.1% in June) and
Entertainment (-19.6% vs. -40.3% in June) have shown an improving
trend, as has Fashion, the largest category (-11.7% vs. -16.4% in
June).
The strong recovery in sales in the US has
particularly been seen in Luxury (+46.6%), Gifts (+27.3%), Home
(+26.3%), Sport (+26.2%) and Jewellery (+26.0%) in Q3, confirming
the trend from H1-2021. Food & Beverage Services has exhibited
a strong recovery to reach -4.7% (vs. -9.4% in June), although
entertainment remains more affected at -40.1%. Fashion sales
exceeded pre-COVID levels in Q3 (+2.0% vs. -4.0% in June).
In addition, Westfield Mall of the Netherlands
(not included in the above statistics) continued its strong opening
with 1.2 million visits per month in Q3.
3. Rent
collectionWith the reopening of the centres, rent
collection by the Group has improved, and is expected to improve
further.
The European collection rate for Q3, based on
rents invoiced, stands at 89%, reflecting a clear improvement on
the first half of the year which was more heavily impacted by
government restrictions, including France at 86% (vs. 66% in Q1 and
60% in Q2) and the UK at 90% (vs. 78% in Q1 and 89% in Q2). The
collection rate in Q3 stands at 88% for the Group.
On a net basis7, adjusted for rent deferrals or
COVID rent relief provided and booked, the collection rate for
9M-2021 stands at 92%, including 90% in Continental Europe, 93% in
the UK and 94% in the US.
In addition, during Q3, the Group collected €137
Mn8 in rents relating to H1 and €27 Mn8 relating to 2020 (in
addition to rents collected in H1-2021).
|
Rent collection (gross
basis)9 |
Region |
Q1 |
Q2 |
Q3 |
Continental Europe |
74% |
74% |
89% |
UK |
78% |
89% |
90% |
Total Europe |
75% |
76% |
89% |
US |
88% |
90% |
87% |
Total URW |
78% |
80% |
88% |
4. Leasing
and vacancyURW has seen a
continued recovery in leasing activity with 518 deals signed in Q3,
bringing the total letting activity YTD to 1,736 deals, +23% vs.
2020 and broadly similar to 2019 (1,783), for a total Minimum
Guaranteed Rent of €239 Mn.
The proportion of long-term deals (above 36
months) signed in Q3 improved compared to H1-2021, at 59% vs. 44%.
As in H1-2021, the uplift on long-term deals signed in Q3 remained
positive, while the reduction in MGR on short-term deals10, in
particular in the US, is expected to be at least partly compensated
by increased sales-based rent. For Continental Europe, the total
MGR uplift on short-and-long-term deals YTD was close to the prior
passing rent (-1.3%).
The lettings included:
- Food Society (an innovative food
hall concept) in CNIT;
- Fusalp (a luxury ski-wear brand) in
Westfield Parly 2;
- Tommy Hilfiger in Toison d’Or;
- Sephora in Westfield Mall of
Scandinavia;
- Peloton in Westfield Garden State
Plaza, Westfield Topanga, Westfield Galleria at Roseville, and
Westfield Old Orchard;
- Allbirds in Westfield Century City
and Westfield Garden State Plaza; and
- Gucci in Westfield Galleria at
Roseville.
In addition, the Group saw several key store
openings in Q3, notably including the largest Zara store in France
in Westfield Les 4 Temps (after the opening of the largest Bershka
in Western Europe which opened in Westfield Forum des Halles in
H1), AliExpress in Westfield La Maquinista and Parquesur in Spain,
and Saint Laurent Paris in Westfield Galleria at Roseville.
Supported by the letting activity, EPRA vacancy
overall improved in Q3 to 7.9% from 8.9% at H1-2021, below the 8.3%
vacancy as at year end 2020, with vacancy being most improved in
the US and remaining at a very controlled level in Continental
Europe:
Region |
Dec-20 |
Jun-21 |
Sep-21 |
Continental Europe |
4.9% |
5.0% |
4.9% |
UK |
9.7% |
12.2% |
11.8% |
Total Europe |
5.6% |
6.1% |
5.9% |
US |
13.1% |
14.0% |
11.8% |
Total URW |
8.3% |
8.9% |
7.9% |
Within Continental Europe, vacancy decreased
slightly as a result of improvement in Spain (4.2% vs. 6.0%),
Central Europe (4.9% vs. 5.6%) and The Netherlands (7.8% vs. 8.0%),
while vacancy remained relatively stable at lower levels in France
(3.8%) and Austria (1.8%).
5. Disposals and
post-closing events On September 16, 2021, URW completed
the sale and leaseback of its HQ building, 7 Adenauer, in the 16th
district of Paris, to a French institutional buyer. The Net
Disposal Price of the transaction was €249 Mn.
The Group also continued efforts to streamline
its US portfolio. As a result, on October 12, 2021, URW completed
the disposal of the Palisade residential building at Westfield UTC,
San Diego, to its existing 50% JV partner, JP Morgan. The purchase
price of US$238 Mn (at 100%) reflects a 15% premium to the latest
appraisal, signalling the relative premium of residential and
commercial buildings in close proximity to URW’s flagship assets
and the value of densification projects in these locations.
In addition, on October 14, 2021, in conjunction
with a non-judicial foreclosure, the company and the lender agreed
to the appointment of a receiver for Westfield Palm Desert, which
transferred the management and control of the asset. On this date,
URW derecognised the asset and associated debt (US$125 Mn) and from
then will not recognise any revenues or interest expense in
connection with it. This transaction is expected to have a positive
impact on the Group’s net asset value.
During Q3, URW also set up a new JV arrangement
for a potential development project in the Paris region, with
proceeds for the 51% interest sold equating to €88 Mn. This
transaction brought total proceeds to date for the Group’s European
disposal programme to €1.8 Bn, i.e. 44% of the €4.0 Bn planned in
Europe by the end of 2022.
The Group continues to pursue its deleveraging
strategy and to progress a number of disposal projects.
Finally, on October 22, 2021, the Group signed a
further c. 8,600 sqm lease in the Trinity office development, which
was delivered in 2020, bringing overall letting of that property to
44% of the total space.
6. Marketing
eventsOn September 30, 2021, in a first for the industry,
URW demonstrated the power of its global network of physical assets
and the emerging digital opportunity to be a launchpad for
retailers, artists and brands. Via a digital platform under
the Westfield brand, on social channels including Instagram and
YouTube, and at 21 events at centres in 10 countries, millions of
fans enjoyed an exclusive concert experience with Lady Gaga to
celebrate the release of her new album with Tony Bennett titled
Love for Sale. The program generated substantial marketing value
for the Group and further demonstrates the strength of the global
Westfield platform, serving as a clear example to retailers,
artists and brands of the potential to leverage that platform to
drive strong outcomes.
7. OutlookIn
light of the current COVID situation in the Group’s major regions,
which has included no new full lockdowns during Q3, and the return
to a normalised level of activity leading to improved key
performance indicators for the Group, URW expects to achieve an
Adjusted Recurring Earnings per Share of at least €6.75 for
FY-2021. Adjusted for a c. 65 cent impact of disposals completed in
both 2020 and 2021, this equates to a level slightly above FY-2020,
despite the increased cost of debt, resulting in particular from
the additional liquidity raised by the Group.
This forecast is premised on the Group’s current
expectation of no reintroduction of strict sanitary measures
impacting the operation of the Group’s centres between now and the
end of the year.
8. Financial
scheduleThe next financial events in the Group’s calendar
will be:
February
10, 2022: 2021
Full-Year results (before market) March
30, 2022: URW
Investor Day, Westfield Mall of the Netherlands
For further information, please
contact:
Investor RelationsSamuel
Warwood +33 7 60 44 10
25Samuel.Warwood@urw.com
Media Relations Pauline Duclos-Lenoir+33 7
60 30 63 54Pauline.Duclos-lenoir@urw.com
Cornelia Schnepf – FinElk+44 7387 108 998
Cornelia.Schnepf@finelk.eu
About Unibail-Rodamco-Westfield
Unibail-Rodamco-Westfield is the premier global developer and
operator of Flagship Destinations, with a portfolio valued at €55.0
Bn as at June 30, 2021, of which 86% in retail, 7% in offices, 5%
in convention & exhibition venues and 2% in services.
Currently, the Group owns and operates 85 shopping centres,
including 53 Flagships in the most dynamic cities in Europe and the
United States. Present on two continents and in 12 countries,
Unibail-Rodamco-Westfield provides a unique platform for retailers
and brand events and offers an exceptional and constantly renewed
experience for customers.
With the support of
its 2,900 professionals and an unparalleled track-record and
know-how, Unibail-Rodamco-Westfield is ideally positioned to
generate superior value and develop world-class projects.
Unibail-Rodamco-Westfield distinguishes itself by its Better Places
2030 agenda, that sets its ambition to create better places that
respect the highest environmental standards and contribute to
better cities. Unibail-Rodamco-Westfield stapled shares are listed
on Euronext Amsterdam and Euronext Paris (Euronext ticker: URW),
with a secondary listing in Australia through Chess Depositary
Interests. The Group benefits from a BBB+ rating from Standard
& Poor’s and from a Baa2 rating from Moody’s.
For more information,
please visit www.urw.comVisit our Media Library at
https://mediacentre.urw.comFollow the Group updates on Twitter
@urw_group, Linkedin @Unibail-Rodamco-Westfield and Instagram
@urw_group
1 Proportionate reflects the impact of
proportional consolidation instead of the equity method required by
IFRS 11 of the URW jointly controlled assets.2 URW’s remaining
share of income is now accounted for under equity.3 Proportionate
reflects the impact of proportional consolidation instead of the
equity method required by IFRS 11 of the URW jointly controlled
assets.4 Excluding Westfield World Trade Center and Westfield San
Francisco Centre. 5 Footfall for all centres in operation,
including extensions of existing assets, but excluding deliveries
of new brownfield projects, newly acquired assets and assets under
heavy refurbishment (Ursynow, Westfield La Part-Dieu, Les Ateliers
Gaîté, CNIT, Gropius Passagen, Garbera and Westfield Valley Fair).
Excludes Carrousel du Louvre. Excludes Zlote Tarasy as this centre
is not managed by URW. For the US, footfall only includes the 20
centres for which at least one year of comparable Springboard or
ShopperTrak data is available.6 Tenant sales for all centres
(except The Netherlands) in operation, including extensions of
existing assets, but excluding deliveries of new brownfield
projects, newly acquired assets and assets under heavy
refurbishment (Ursynow, Westfield La Part-Dieu, Les Ateliers Gaîté,
CNIT, Gropius Passagen, Garbera and Westfield Valley Fair).
Excludes Zlote Tarasy as this centre is not managed by URW.
Excludes Carrousel du Louvre. Excludes Auto branch for Europe and
Auto and Department Stores for the US.7 Rent collection expressed
as a % of billable less COVID related rent relief granted and rents
deferred, as at October 21, 2021. 8 Rent at 100% including VAT.
9 Rent collection expressed as gross collection
of all amounts billable before COVID related rent relief, as at
October 21, 2021. 10 Between 12 and 36 months.
- URW Financial information as at September 30 2021
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