URW sells Paris HQ for €249m as deleveraging continues amid uncertain outlook

Listed property group Unibail-Rodamco-Westfield (URW) said it has sold its Paris headquarters for €249 mln in a sale-and-leaseback deal as part of continuing efforts to deleverage the business.

The disposal of 7 Adenauer, which was agreed in early July and is expected to close in September, was announced at the presentation of URW’s H1 earnings results on Wednesday.

URW said the net disposal price of €249 mln for the property in Paris’ 16th district reflected a premium to the last appraisal value. The buyer was not disclosed but is believed to be a French institutional investor.

Several minor disposals have also been made recently, including the Le Blériot office building in Paris, the Q-Huset office building in Täby, and a land plot in Osnabrück, for a total net disposal price of €63 mln.

The European and US shopping centre giant said it remained committed to deleveraging, through disposals, limiting CAPEX and retaining earnings, as tough Covid operating conditions continue.

Including other asset sales announced earlier in H1, URW said that when these are finalised it will have achieved €1.7 bn out of the €4 bn European disposal programme slated for completion by the end of 2022.

In parallel, a taskforce has been put in place, and several options are under consideration, to deliver a radical reduction of the group’s exposure to the US.

URW said first-half results reflected ‘significant Covid-19-related disruption’. Total net rental income was down 22.4% at €785 mln on a like-for-like basis compared with a year earlier, while the recurring net result dropped 29.3% to €472 mln. The group reported a rent collection rate of 89% in H1, exceeding the year-earlier level despite lower collection in France due to a pending decision on government support.

On a positive note, the group said all its centres were now open and trading, showing an encouraging recovery in footfall and sales data following an easing of trading restrictions.

URW said its flagship strategy was endorsed by the successful opening of Westfield Mall of the Netherlands and the delivery of the last phase of La Part-Dieu and La Maquinista extensions.

Commenting on the results, CEO Jean-Marie Tritant said: ‘URW has demonstrated continued resilience in the face of tough operating conditions, with substantial lockdowns across our network during the period. Whenever restrictions were lifted, we have seen a recovery in both footfall and sales, in most cases at higher levels than those seen during the reopening in 2020.

‘Throughout the first half we maintained our focus on key operational and financial priorities. This includes the successful opening of our latest flagship destination Westfield Mall of the Netherlands and marked progress in our deleveraging efforts thanks to both European disposals and the on-going streamlining of our US portfolio. This process is supported by favourable access to credit markets, giving us ample liquidity to cover all refinancing needs for the next 36 months.’

Nevertheless, the outlook remains uncertain, Tritant said: ‘While positive indicators and continued progress of the vaccination rollout give us reasons to be cautiously optimistic, the Covid-19 situation and potential government responses to it remain a source of uncertainty in terms of outlook.’


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