Paris, Amsterdam, April 27, 2022
Press release
UNIBAIL-RODAMCO-WESTFIELD Q1-2022 TRADING
UPDATE
- Turnover up +34.2% vs. Q1-2021, reflecting strong post
COVID-19 recovery and asset deliveries
- Tenant sales at 93% of 2019 levels in Q1 and 95% in
March
- Rent collection improved to 93% for Q1, with continued
increase in the 2021 collection rate
- Sustained leasing activity with 521 deals signed in Q1, up
+4% vs. 2019; proportion of long-term deals increased to
60%
- Group MGR uplift stood at +6%, reflecting continued retailer
demand for URW’s Flagship destinations
- Continued streamlining of US portfolio with sale of
Promenade Mall land plot at a 60% premium to latest
appraisal
- European disposal programme progressed with disposal of
Solna Centrum, a 45% stake in Westfield Carré Sénart completed and
agreement for sale of Gera Arcaden signed
- AREPS guidance of €8.20 to €8.40 confirmed for 2022
Commenting on the first quarter of 2022,
Jean-Marie Tritant, Chief Executive Officer said:
“Our portfolio of Flagship destinations in the
wealthiest cities and catchment areas performed well in Q1,
demonstrating the continued strength of the recovery. Tenant sales
have recovered further during the quarter and reached 93% of 2019
levels in Q1 and 95% in March. This has supported the continued
improvement of rent collection to 93% for the Group as a
whole.
The vital role our centres play in the
omnichannel strategy of leading brands was also illustrated by
strong leasing performance. We signed more deals than in Q1-2019,
realising an MGR uplift of +6%.
We also laid the foundations for our strategy to
grow media revenues by converting our footfall into qualified
audiences. During the quarter, we signed a new media contract with
Clear Channel France, built on an improved revenue share, and
activated a programmatic digital out-of-home advertising campaign,
that will allow us to better measure the effectiveness of in-mall
advertising, audience behaviours and sales conversion.
During the quarter, we pursued our deleveraging
effort with the streamlining of our US portfolio through the
disposal of the former Promenade Mall land plot, while in Europe
the Group signed an agreement for the disposal of Gera Arcaden,
both at a premium to the last appraisal.
Based on Q1 performance, including the improved
collection levels and sustained leasing activity, we confirm our
2022 AREPS guidance of €8.20 to €8.40 per share, while we are
monitoring very closely the potential impact of the wider economic
and geopolitical situation on our markets.”
1. Turnover
The proportionate turnover1 of URW for the first
three months of 2022 amounted to €897.1 Mn, up by +34.2%
year-on-year, reflecting the impact of the post COVID-19 recovery
and asset deliveries, partly offset by the impact of disposals.
Turnover |
|
IFRS |
Proportionate |
YTD in €
Mn, excluding VAT |
Q1-2022 |
Q1-2021 restated2 |
Change |
Q1-2022 |
Q1-2021 restated2 |
Change |
Shopping Centres |
572.9 |
442.8 |
29.4% |
733.3 |
569.8 |
28.7% |
Gross Rental Income |
480.8 |
360.6 |
33.4% |
622.4 |
472.8 |
31.7% |
Service charge income |
92.1 |
82.2 |
12.0% |
110.9 |
97.0 |
14.3% |
Offices & Others |
22.0 |
21.1 |
4.2% |
23.5 |
23.2 |
1.1% |
Gross Rental Income |
17.8 |
17.4 |
2.0% |
19.0 |
19.5 |
-2.3% |
Service charge income |
4.3 |
3.7 |
14.4% |
4.5 |
3.7 |
18.9% |
Convention & Exhibition |
61.2 |
12.8 |
n.m. |
61.9 |
13.0 |
n.m. |
Gross Rental Income |
41.4 |
10.1 |
n.m. |
42.1 |
10.2 |
n.m. |
Service charge income |
1.3 |
1.3 |
4.1% |
1.3 |
1.3 |
4.1% |
Services |
18.5 |
1.5 |
n.m. |
18.5 |
1.5 |
n.m. |
Property services and other activities
revenues |
30.6 |
26.5 |
15.8% |
30.7 |
26.5 |
15.9% |
Property
development and project management revenues |
47.8 |
36.2 |
31.8% |
47.8 |
36.2 |
31.8% |
Total |
734.5 |
539.4 |
36.2% |
897.1 |
668.7 |
34.2% |
2. Gross Rental Income
From an accounting standpoint, Gross Rental
Income (“GRI”) includes the COVID-19 rent discounts, indexation,
vacancy impact, and variable revenues, while doubtful debtor
provisions are part of the property operating expenses.
The GRI for the Shopping Centre division
amounted on a proportionate basis to €622.4 Mn for Q1-2022, an
increase of +31.7%. The GRI increase is primarily due to a base
effect of rent relief provided in Q1-2021, when lockdowns were in
place in all regions except in the US, while no rent relief has
been accounted for shopping centres3 in the Q1-2022 P&L, as
well as due to indexation.
Growth was strong in Austria and Poland (in the
Central Europe region) where rents and service charges were not due
during lockdown periods. In addition, the Group benefitted from an
improvement in variable income (SBR, parking income and Commercial
Partnerships), in particular in the UK and the US. The Netherlands
benefitted from the delivery of Westfield Mall of the Netherlands
in March 2021, while results for the Nordics were affected by the
disposal of Solna Centrum in February 2022. In the US, the Group
also benefitted from a positive FX impact, partly offset by the
foreclosure of Sarasota, Broward and Palm Desert and remaining
rental abatements for tenants in the airport business.
GRI for the Offices & Others division was
down marginally compared to Q1-2021, driven by the disposal of
SHiFT, Les Villages 3, 4 and 6, Le Blériot, and the Palisade
residential building at Westfield UTC in 2021, partly offset by the
successful leasing of Trinity and the delivery of Pullman
Montparnasse. Convention & Exhibition GRI increased to €42.1 Mn
from €10.2 Mn in Q1-2021, as the business has recovered strongly
with 102 events in Q1-2022 compared to 13 events in Q1-2021.
Gross Rental Income |
|
IFRS |
Proportionate |
YTD
in € Mn, excluding VAT |
Q1-2022 |
Q1-2021 |
Change |
Q1-2022 |
Q1-2021 |
Change |
Shopping
Centres |
480.8 |
360.6 |
33.4% |
622.4 |
472.8 |
31.7% |
France |
139.4 |
111.3 |
25.3% |
141.9 |
112.8 |
25.8% |
Spain |
43.0 |
33.9 |
26.9% |
43.1 |
33.9 |
27.0% |
Southern
Europe |
182.4 |
145.2 |
25.6% |
185.0 |
146.8 |
26.1% |
Central Europe |
51.9 |
34.4 |
50.9% |
57.6 |
36.1 |
59.4% |
Austria |
36.3 |
13.5 |
168.7% |
36.3 |
13.5 |
168.7% |
Germany |
23.8 |
14.5 |
64.4% |
34.5 |
20.4 |
68.9% |
Central and
Eastern Europe |
111.9 |
62.3 |
79.5% |
128.3 |
70.0 |
83.2% |
Nordics |
28.9 |
27.9 |
3.4% |
28.9 |
27.9 |
3.4% |
The Netherlands |
22.6 |
13.9 |
63.1% |
22.6 |
13.9 |
63.1% |
Northern
Europe |
51.5 |
41.8 |
23.2% |
51.5 |
41.8 |
23.2% |
United
Kingdom |
25.7 |
9.5 |
169.9% |
47.7 |
20.2 |
135.7% |
United States |
109.3 |
101.7 |
7.4% |
209.9 |
193.9 |
8.2% |
Offices
& Others |
17.8 |
17.4 |
2.0% |
19.0 |
19.5 |
-2.3% |
France |
12.3 |
9.3 |
32.2% |
12.9 |
9.3 |
37.8% |
Other countries |
5.4 |
8.1 |
-32.9% |
6.2 |
10.2 |
-39.3% |
Convention & Exhibition |
41.4 |
10.1 |
n.m. |
42.1 |
10.2 |
n.m. |
Total |
540.0 |
388.0 |
39.2% |
683.5 |
502.5 |
36.0% |
Figures may not add up due to rounding.
Major events Q11. Footfall4
& Sales5
Sales reached 93% of 2019 levels in Q1 and 95%
in March; when excluding CBD assets6, which were still impacted by
work from home, March sales came to 97%. Due to more productive
visits, sales continue to outperform footfall, which came to 82% of
2019 levels in Q1 and 84% in March.
In Europe, sales remained affected by
restrictions and came to 89% in Q1 as a whole, with figures
improving to 91% in March. In Q1, the Omicron wave with a record
high number of COVID-19 cases, led to a lockdown in The Netherlands
as well as some restrictions in other countries, including guidance
to work from home, capacity restrictions, reduced opening hours for
F&B, restrictions for non-vaccinated persons and mask mandates,
holding back the recovery. Sales in Germany and Austria, which had
more stringent restrictions, remained more impacted, while Central
Europe and the Nordics performed well at 96% and 93%. The UK showed
an improvement from 84% in Q4-2021 to 89% in Q1-2022.
In the US, sales continue to be consistently
above 2019 levels, reaching 102% in Q1 and 104% in March. This
strong performance confirms the positive trend seen in 2021.
|
Footfall |
Tenant Sales |
|
March 2022 |
Q1-2022 |
March 2022 |
Q1-2022 |
France |
85% |
84% |
91% |
89% |
Spain |
82% |
83% |
91% |
86% |
Central Europe |
84% |
78% |
99% |
96% |
Austria |
81% |
74% |
88% |
84% |
Germany |
76% |
74% |
83% |
83% |
Nordics |
85% |
81% |
95% |
93% |
The Netherlands |
75% |
68% |
n.a. |
n.a. |
Continental Europe |
82% |
80% |
91% |
89% |
UK |
84% |
81% |
88% |
89% |
Europe |
83% |
80% |
91% |
89% |
US |
86% |
86% |
104% |
102% |
Total Group |
84% |
82% |
95% |
93% |
In Europe, some of the best performing
categories during the quarter compared to 2019 were Luxury (+6.3%),
Health & Beauty (+4.1%) and Sport (-0.7%). F&B performed in
line with the overall sales levels at -9.7%. Entertainment
continues to improve, but remains more affected at -25.8%, due to
the remaining COVID-19 restrictions experienced in Q1. Fashion
sales came to -14.9% on a same store basis.
The strong recovery in the US continues to be
broad-based with almost all categories performing above 2019
levels. In particular, Luxury (+66.3%), Home (+33.4%) and Sport
(+20.6%) exhibited strong performance. Fashion at -4.4% and F&B
at -2.5% are also nearing pre-COVID levels, while also, in the US,
Entertainment remains the more affected category at -21.6%7.
2. Rent collection
Rent collection8 continued to improve reaching
93% for the Group in Q1-2022, and is expected to improve further as
operating conditions normalise.
The European collection rate stood at 93%,
driven by the UK, Central Europe, and the Nordics, partly offset by
The Netherlands and France. In the US, the collection rate also
reached 93%9.
Region |
January |
February |
March |
Q1 |
Continental Europe |
93% |
93% |
93% |
93% |
UK |
95% |
95% |
95% |
95% |
Total Europe |
94% |
93% |
93% |
93% |
US |
93% |
93% |
92% |
93% |
Total URW |
93% |
93% |
93% |
93% |
Furthermore, the Group has collected €162 Mn10
in rents related to 2021, in 2022, and continues to improve its
collection rate, which increased from 93% to 95% for Q3-2021 and
from 90% to 94% for Q4-2021.
3. Leasing and vacancy
Leasing activity remained strong with 521 deals
signed in Q1, up +4% vs. 2019 (50111), for a total Minimum
Guaranteed Rent of €85.2 Mn (vs. €80.8 Mn in Q1-2019) and a MGR
uplift of +6%, illustrating continued retailer appetite for URW’s
Flagship destinations.
The Group pursued its pragmatic and proactive
leasing strategy designed to protect asset values and select the
right time to negotiate long-term leases under improved conditions,
with the proportion of long-term deals (above 36 months) signed in
Q1 improving compared to H2-2021, at 60% vs. 55%, mainly driven by
the European portfolio.
The uplift continued to be positive on long-term
deals for the Group, while in the US and the UK, short term deals
had a negative MGR uplift, partly compensated by increased SBR.
SBR, which is mainly driven by the US, amounted
to €32.5 Mn in Q1-2022, almost double the €16.8 Mn of SBR in
Q1-2021.
The lettings included:
- A nearly 3,000 sqm H&M in Westfield Les 4 Temps;
- A 1,350 sqm food hall concept in Westfield Mall of
Scandinavia;
- Gucci in Westfield London;
- Sephora in Bonaire;
- American Girl in Westfield Century City;
- Céline in Westfield Valley Fair;
- JD Sports in Westfield Euralille and Westfield CentrO.
In addition, the Group saw several key store
openings in Q1, notably the AMC theatres in Westfield UTC and
Westfield Montgomery, Rihanna’s Savage X Fenty lingerie store in
Westfield Culver City, the SmileDirectClub in Westfield London and
Westfield Stratford City, illustrating the growing health segment,
Lego in Rennes Alma and Youseum, a social media experience, in
Westfield Mall of Scandinavia.
EPRA vacancy increased by +50 bps in the quarter
vs. December 2021 to 7.5% for the Group, in line with the seasonal
pattern observed in previous years. The vacancy is expected to
decrease below 2021 levels in 2022.
In Continental Europe, vacancy increased by +20
bps to 4.2%, mainly driven by Austria and Germany, partly offset by
the Nordics and The Netherlands. In the UK, the vacancy increased
from 10.6% to 11.6%, mainly driven by Westfield London. Plans to
repurpose retail space in Westfield London to high-growth
alternative uses are in place. In the US, the vacancy increase was
+40 bps to 11.4% due to the CBD assets12 which are still affected
by work from home. Excluding the CBD assets, the vacancy in US
Flagships fell with -40 bps to 8.9%.
4. Commercial Partnerships
Commercial Partnerships13 increased from €10.8
Mn in Q1-2021 to €25.5 Mn in Q1-2022.
At its Investor Day in March, the Group
presented its plan to increase revenues from advertising, brand
experience and data by turning URW’s footfall into qualified
audiences highly valued by brands. URW expects to generate €75 Mn
in annual net revenues14 in Europe by 2024, a +€45 Mn increase
compared to 2021, with strong growth potential beyond the plan
horizon.
In line with this, the Group announced an 8-year
new media contract with Clear Channel France, the operator of URW’s
over 600 digital out-of-home media screens throughout URW’s 20
French shopping centres, which welcome more than 185 million
customer visits each year. The agreement will increase URW’s income
through an improved revenue share and new innovative solutions, and
is part of the €8.5 Mn14 of additional media advertising revenues
that have already been secured, as announced at the Investor
Day.
5. Disposals
On February 1, 2022, URW completed the sale of
Solna Centrum to Alecta Fastigheter for an agreed Total Acquisition
Cost of €272 Mn.
In addition, the Group completed on February 16,
2022, the disposal of a 45% stake in the Westfield Carré Sénart
shopping centre to Société Générale Assurances and BNP Paribas
Cardif, with an IFRS net debt reduction of €280 Mn.
Furthermore, the Group announced on April 4,
2022, an agreement with an institutional investor for the sale of
Gera Arcaden, in Germany, for an agreed Total Acquisition Cost of
€116 Mn (at 100%, URW share 51%), which represents a premium to the
last appraised value. The transaction is expected to complete in
Q2-2022, subject to standard closing conditions.
URW also continued to streamline its US regional
portfolio with the sale of the 34-acre site of the former Promenade
Mall, located in the San Fernando Valley of Los Angeles, to a group
of private investors. This transaction demonstrates the significant
potential for alternative investment in and around the company’s
assets, which URW can leverage to support its efforts to
deleverage. The sale price of $150 Mn (at 100%, URW share 55%)
reflects a 60% premium to the latest appraisal.
6. Outlook
Based on Q1 performance, including the improved
collection levels and sustained leasing activity, the Group
confirms its 2022 AREPS guidance of €8.20 to €8.40 per share, while
the Group continues to closely monitor the potential impact of the
wider economic and geopolitical situation on its markets
7. Financial schedule
The next financial events in the Group’s
calendar will be:May 11, 2022: AGM Unibail-Rodamco-Westfield
SE July 28, 2022: 2022 Half-Year Results (before market
opening)
For further information, please
contact:
Investor RelationsMaarten Otte +33 7 63 86 88 78
Maarten.otte@urw.com
Media Relations Nathalie Feld – Image 7+33 6 30 47
18 37nfeld@image7.fr
Cornelia Schnepf – FinElk+44 7387 108 998
Cornelia.Schnepf@finelk.eu
About Unibail-Rodamco-Westfield
Unibail-Rodamco-Westfield is a dynamic, global
developer and operator of Flagship Destinations, with a portfolio
valued at €54.5 Bn as at December 31, 2021, of which 86% in retail,
6% in offices, 5% in convention & exhibition venues and 2% in
services. Currently, the Group owns and operates 84 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 2,800
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 Service charge
income is included in the turnover in compliance with IFRS 15. The
figures for Q1-2021 were restated accordingly for a total amount of
€87.2 Mn under IFRS and €102.0 Mn under Proportionate.3 Excluding
airports.4 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, Westfield Mall of the Netherlands
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 23 centres for which at least one year
of comparable data is available.5 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.6 Westfield World Trade
Center, Westfield San Francisco Centre, Westfield London, Westfield
Mall of Scandinavia, Westfield Forum des Halles and Westfield Les 4
Temps.7 Restated for the Westfield UTC & Westfield Montgomery
Arclight (Chapter 7) cinema closures, relet to AMC and opening in
February and March 2022, respectively.8 Retail only, assets at
100%. MGR + CAM in the US. As at April 21, 2022.9 Rents invoiced
net of adjustments.10 Rent, SBR and service charges at 100%
including VAT.11 Restated for disposals.12 Westfield World Trade
Center and Westfield San Francisco Centre.13 Group figure (Europe +
US), including the new division, on a proportionate basis.14 At
100%.
- UNIBAIL-RODAMCO-WESTFIELD Q1-2022 TRADING UPDATE
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