Unibail unveils share growth, continues disposals

Unibail-Rodamco-Westfield has unveiled strong recurring earnings per share growth of 7.3% in the first half of 2018, marking the first results since its €13 bn takeover of Westfield in June of this year.

Its continental European shopping centre portfolio achieved a like-for-like growth of 4.7% in net rental income (NRI), while flagship retail assets grew by 5.7%. According to Unibail, the group signed 641 leases with a minimum guaranteed rent uplift of 10.6%, of which 14.4% for its flagship assets. The rotation rate amounted to 5.9%, while EPRA vacancy decreased by -10 bps to 2.3%.

Unibail's offices division saw its NRI grow 14.14% like-for-like after demand in the Paris region remained at the highest level since 2007, while the available supply declined by 9% from 31 December 2017. Consequently, the group let more than 61,800 m² in France, including Shift (43,300 m²), fully let to Nestlé more than one year before its delivery.

However, its convention & exhibition assets saw NRI slump for -1.8%, partially affected by the closure for refurbishment of the Pullmak Montparnasse hotel in Paris.

In the US, occupancy declined by -140 bps to 94.3%, impacted by bankruptcies and big box store closures. Deliveries of Westfield Century City and Westfield UTC contributed to a net operating income improvement of 6.1%.

Footfall in the UK was up 3.7% in the first half of the year, driven by the opening of the extension of Westfield London.

Disposals focus
'Since June 30, the group has agreed to sell or executed the disposal of a total of €1.3 bn of mostly Continental European assets and is working on further disposals,' noted CEO Christophe Cuvillier. 'Our credit metrics remain healthy, with a cost of debt of 1.5%, an issuer credit rating of 7.1x, and an LTV post disposals of less than 37%.

'Our focus remains on continuous improvement in our portfolio through disciplined asset management, our rotation strategy, and the build-out of the development pipeline. The skills of the Unibail-Rodamco-Westfield team and our best in breed assets are well positioned to deliver value for our shareholders.'

Unibail said its development pipeline currently stands at €12.5 bn, but that it 'retains flexibiity, with commited projects of only €2.8 bn.' The retail pipeline is split between greenfield/brownfield projects (52%), which are all in Europe, and extensions and renovations (48%) in both continents.

Unibail announced that significant progress has been made on the two major Westfield projects in Europe, with the compulsory purchase order obtained for the Croydon development and the building permit granted for Westfield Milan.


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