Unibail-Rodamco-Westfield Q3-2022 Trading Update

Paris, Amsterdam, October 26, 2022

Press launch

UNIBAIL-RODAMCO-WESTFIELD Q3-2022 TRADING UPDATE

• Turnover up +20.8% in 9M-2022 vs. 9M-2021, reflecting asset high quality, the continued submit COVID-19 restoration and profitable asset deliveries
• Tenant gross sales in Q3-2022 exceeded 2019 ranges at 103% (+10% vs. Q3-2021 ranges) and 104% in September, confirming the optimistic development seen in Q2-2022. Continental Europe above 2019 ranges at 102% for Q3-2022 (+11% vs. Q3-2021) and September outperforming with 104%. UK at 94% of 2019 ranges and +17% vs. Q3-2021 ranges. US at 108% of 2019 and +6% vs. Q3-2021 ranges
• Rent assortment improved to 96% for Q3-2022 (vs. 88% at Q3–2021), whereas H1-2022 assortment price elevated to 97% in line with pre-COVID ranges
• Sustained leasing exercise reflecting continued retailer demand for URW’s Flagship locations, with 554 offers signed in Q3-2022, up +20%¹ vs. Q3-2019. 1,755 offers signed in 9M-2022 up +20%¹ vs. 9M–2019. Minimum Guaranteed Rent uplift of +5.6% in 9M-2022 vs. +2.7% in H1-2022
• Overall emptiness steady in Q3-2022 at 6.9% vs. H1-2022, with a continued enchancment within the UK and the US
• Convention & Exhibition GRI as much as €128.4 Mn in 9M-2022 (€53.8 Mn in 9M-2021) with sturdy restoration in exercise. Revenue for signed and pre-booked occasions in Viparis venues for 2022 at c. 95% of 2018 pre-bookings degree
• Ongoing streamlining of US portfolio with sale of regional asset Westfield Santa Anita for $537.5 Mn (at 100%, URW share 49%)
• €3.2 Bn of €4.0 Bn European disposals programme achieved, with accomplished disposals of Villeneuve 2, Aupark (27% stake), Carré Sénart Shopping Parc, Almere Centrum and Gera Arcaden. Given present market situations, completion of European disposals programme anticipated in 2023
• €13 Bn of money and out there credit score strains available securing financing wants for greater than 36 months
• Sustainability management recognised by long-term presence within the prime quartile of all ESG rankings, together with Q3-2022 renewal of AAA ESG ranking by MSCI
• 2022 AREPS steerage elevated from a minimum of €8.90 to a minimum of €9.10
   

Commenting on the outcomes, Jean-Marie Tritant, Chief Executive Officer acknowledged:

 “Turnover was up +21% year–on–year, demonstrating the quality of our portfolio, our operational efficiency and the successful delivery of new assets at high pre-letting levels.

Tenant sales in Q3 were at 103% of pre-COVID levels continuing the trend seen in previous quarters, with Continental Europe at 102% and the US at 108%.

Leasing dynamics were solid, both in terms of volumes and conditions, with a +5.6% uplift in MGR for the first nine months of 2022, demonstrating continued retailer appetite for our Flagship destinations. The steady improvement in US and UK vacancy levels, as well as the increase in rent collection to 2019 levels, both confirm the solid recovery trend seen in H1-2022.

Our Convention & Exhibition business has rebounded from the extended closures of the pandemic and is on track to reach pre-COVID levels. Our Offices activity performed well, driven by improved leasing and new deliveries.

We also continued to implement our strategy to grow our Commercial Partnerships revenues with the launch of Westfield Rise, an in-house media, brand experience and data partnerships agency.

We made further progress on our deleveraging programme with the disposal of Westfield Santa Anita in the US and the closing of five transactions in Europe. While market conditions may affect overall timing, we are committed to completing our deleveraging plan and are supported by a strong liquidity position and the robust operational performance of our assets.

 Based on the performance of the first nine months of 2022 including a strong Q3 that confirms the positive trend seen in H1, the Group is upgrading its 2022 AREPS guidance from at least €8.90 to at least €9.10 per share.”

1. Turnover

Proportionate turnover² for the primary 9 months of 2022 amounted to €2,733.2 Mn, up by +20.8% year-on-year, reflecting the optimistic influence of the submit COVID-19 restoration, dynamic leasing exercise and asset deliveries in Shopping Centres, leasing progress on Offices and the continued enchancment of C&E exercise, partly offset by the influence of disposals.

Figures might not add up resulting from rounding.

             2. Gross Rental Income⁴

GRI for the Shopping Centres division on a proportionate foundation amounted to €1,914.1 Mn for the 9 months to September 30, a rise of +18.7% in comparison with the primary 9 months of 2021. The GRI enhance is primarily as a result of absence of COVID-19 hire reduction, indexation, sturdy leasing exercise in addition to increased Sales Based Rents, Commercial Partnerships and parking revenue. The development was additionally supported by a optimistic FX contribution from the power of the US Dollar and asset deliveries, partly offset by disposals.

Increased GRI was recorded in all areas besides Nordics. Spain benefitted from dynamic leasing exercise and a termination indemnity, whereas efficiency in Austria and Poland, past working efficiency, mirrored the truth that rents and repair expenses weren’t legally due throughout lockdown intervals in 2021. The Netherlands benefitted from the supply of Westfield Mall of the Netherlands in March 2021, whereas the GRI for the Nordics was down barely reflecting the deliberate disposal of Solna Centrum in February 2022 in addition to damaging FX influence. In the US, the efficiency was optimistic, even when offset by US foreclosures and disposals carried out as a part of wider deleveraging effort, primarily due to a optimistic FX influence, dynamic leasing exercise and emptiness discount.

GRI for the Offices & Others division improved by +7.2% in 9M-2022 in comparison with 9M-2021, pushed by the leasing of Trinity, which is 74% let as of the top of Q3-2022, the deliveries of the Pullman Montparnasse resort, places of work and parking at Les Ateliers Gaîté, whereas additionally taking into account the influence of the disposals carried out as a part of the Group’s European disposal programme.

Convention & Exhibition GRI elevated from €53.8 Mn in 9M-2021 to €128.4 Mn in 9M-2022. The business has seen a powerful restoration with 415 occasions in 9M-2022, in comparison with 166 occasions in 9M-2021. As at September 30, 2022, income from accomplished, signed and pre-booked occasions in Viparis venues for 2022 represents c. 95% of 2018 pre-bookings degree for the 12 months, and amounted to c. 107% of its anticipated 2022 rental revenue.

Figures might not add up resulting from rounding.

Major occasions Q3

1. Footfall⁵ & Sales⁶

Tenant gross sales degree in Q3-2022 confirms the optimistic dynamics seen in Q2-2022 and H1-2022. Overall, Q3-2022 gross sales reached 110% of 2021 ranges and 103% of 2019 ranges. In Continental Europe, Q3-2022 gross sales reached 111% of 2021 ranges and 102% of 2019 ranges, with all areas above 2019 ranges apart from Spain. Sales reached 94% within the UK. In the US, gross sales continued to be constantly above 2019 ranges, reaching 108% in Q3-2022 (106% of 2021 ranges). Q3-2022 gross sales on the Group’s US Flagship belongings reached 116% of 2019 ranges whereas regional belongings had been at 105%, exceeding H1-2022 ranges respectively at 114% and 100%. Central Business District belongings continued to be affected by earn a living from home and broader points for downtown San Francisco.

In September, general Group gross sales reached 104% of 2019 ranges. Continental Europe stood at 104% with France, Central Europe, Austria and Germany reaching 104%, 116%, 111% and 103% of 2019 ranges respectively. September gross sales within the UK had been at 92% whereas the US was at 108% (116% for Flagship belongings, 105% for Regional belongings).

Strong Q3-2022 efficiency resulted in general Group gross sales for 9M-2022 above pre-COVID ranges at 101% of 2019 ranges (in comparison with 99% in H1-2022), with 99% for Continental Europe, 93% for the UK and 108% for the US.

Due to extra productive visits, gross sales proceed to outperform footfall.

Q3-2022 footfall reached 91% of 2019 ranges, barely up in Europe from 85% in H1-2022 to 91% in Q3-2022, steady within the US at 92% and rising within the UK from 86% in H1-2022 to 91% in Q3-2022.

In Europe, a number of the finest performing classes throughout Q3-2022 in comparison with Q3-2019 had been Sport (+13.6%), Health & Beauty (+12.7%), and Jewellery (+9.8%). F&B outperformed the general gross sales ranges at +3.3%. Entertainment continued to enhance, however remained extra affected at -9.0% although lower than in H1. Fashion gross sales got here to -3.3%.

The sturdy restoration within the US continued to be broad-based with virtually all classes performing above 2019 ranges. In explicit, Luxury (+67.3%), Home (+36.0%) and Sport (+31.9%) exhibited sturdy efficiency. Fashion and F&B had been above pre-COVID ranges (103% and 107% of 2019 ranges respectively), whereas additionally, within the US, Entertainment remained affected at -7.2% vs. Q3-2019 however improved in comparison with H1-2022.

          2. Rent collection

Rent assortment⁷ continued to enhance reaching 96% for the Group in Q3-2022. The European assortment price, together with the UK, stood at 96%. In the US, the gathering price reached 94%.

During Q3-2022, the Group continued to gather rents associated to H1-2022, resulting in a rise of assortment price from 96% in July to 97% to this point, in keeping with pre-COVID ranges.

3. Leasing and vacancy

Leasing

Leasing exercise remained sturdy with 554 offers signed in Q3, up +20% vs. Q3-2019 (462 offers⁸) and up +14% vs. Q3-2021 (484 offers⁸), for a complete Minimum Guaranteed Rent (“MGR”) of €100.0 Mn (up +30% vs. Q3-2019 and +37% vs. Q3-2021).

The whole variety of offers signed for 9M-2022 was 1,755, up +11%⁸ in comparison with 9M-2021, and +20%⁸ vs. 9M-2019, comparable to a MGR of €311.2 Mn, +39%⁸ in comparison with 9M-2021 and +25%⁸ in comparison with 9M-2019. The proportion of long-term offers (above 36 months) signed in 9M-2022 (57%) was in keeping with H1-2022 (59%) and above 9M-2021 (49%).

Overall, MGR uplift year-to-date was +5.6% (vs. -6.5% in 9M-2021) confirming the optimistic development seen in H1-2022 (+2.7%) and illustrating retailer urge for food for URW’s Flagship locations. This efficiency is pushed by the MGR uplift of +9.0% in Continental Europe and +4.0% within the US, offset by the UK at -3.3%.

Sales Based Rents⁹ (“SBR”), that are primarily pushed by the US, amounted to €82.9 Mn in 9M-2022 together with €46.1 Mn for the US⁹, progressing additional in comparison with H1-2022 (€55.5 Mn and €31.3 Mn for the US) and 9M-2021 SBR (€49.8 Mn and
€28.5 Mn for the US).

Retailers proceed to extend their surfaces throughout the Group’s procuring centres. In Q3, offers signed included the upsizing of:

• Lacoste, which has been relocated and expanded in Westfield Stratford City;
• Bershka in each Westfield La Part-Dieu and Westfield Stratford City;
• Oysho, doubling its measurement unit each in Westfield Arkadia and Westfield Mokotów;
• Kicks, a well-liked Health & Beauty model in Westfield Täby Centrum.

Other notable offers signed in Q3 included:

• The renewal of Apple in Westfield Parly 2;
• Tomo, the primary sustainable division retailer in The Netherlands, in Westfield Mall of the Netherlands;
• A 380 sqm Tommy Hilfiger flagship retailer in Westfield CentrO;
• The signing of 4 Inditex manufacturers in Westfield Hamburg together with Bershka, Pull&Bear, in addition to Stradivarius and Oysho, which would be the first shops in Germany.

In addition, the Group noticed a number of key retailer openings in Q3:

• A 493 sqm Victoria’s Secret retailer in Westfield Les 4 Temps;
• Nike Rise, a 1,540 sqm idea retailer, in Westfield London;
• JD Sports in Westfield Arkadia and Westfield CentrO;
• Holy Greens, a F&B idea, in Westfield Mall of Scandinavia and Nacka Forum.

Vacancy

EPRA emptiness remained steady in the course of the quarter vs. June 2022 at 6.9% for the Group and was 100 bps under Q3-2021.  
The emptiness is anticipated to lower additional in This autumn.

In Continental Europe, emptiness elevated by +30 bps in June 2022 to 4.3%, primarily resulting from current bankruptcies throughout a number of procuring centres of the Group in France, Spain and Austria and the closure of shops held by Russian homeowners in Poland.
In the UK, the emptiness decreased from 9.7% in June 2022 to 9.5% in September 2022.

In the US, the emptiness lower was -60 bps from 10.4% to 9.8% from June to September. The emptiness in US Flagships fell by -70 bps to 7.6% from June to September 2022 and for US Regionals, the emptiness dropped from 11.9% to 10.9% whereas CBD belongings, most affected by earn a living from home, had a emptiness degree of 23.7%.

         4. Commercial Partnerships and Marketing

Revenue from Commercial Partnerships¹⁰ elevated from €46.0 Mn in 9M-2021 to €76.5 Mn in 9M-2022. This consists of €28.1 Mn for the brand new Media, Brand & Data Partnerships exercise.

In October, the Group introduced the creation of Westfield Rise, an in-house media, model expertise and information partnerships company. This is in keeping with the Group’s technique introduced at its Investor Day in March to develop revenues from media promoting, model expertise and information partnerships, turning important footfall throughout its European belongings into a professional viewers, whereas additionally leveraging the Westfield model’s important worth to retailers.

URW expects to generate €75 Mn in annual web revenues¹¹ in Europe by 2024 for the Media, Brand & Data Partnerships exercise, a +€45 Mn enhance in comparison with 2021, with sturdy development potential past the plan horizon.

As introduced in May, URW rolled out the Westfield model to 3 new Flagship centres in Europe, together with Westfield Parquesur in Madrid, Westfield Täby Centrum in Stockholm, and Westfield Mokotów in Warsaw.

5. New Openings

Les Ateliers Gaîté is a sustainable mixed-use redevelopment that integrates residential, places of work and a resort alongside new community-oriented retail and facilities that meet the wants of native residents and employees, in addition to a variety of restaurant and leisure choices – together with the primary Food Society meals corridor in Paris with 15 kiosks and three bars. The growth additionally incorporates 62 social housing models which will probably be owned by the City of Paris and triples the world devoted to public companies, together with a brand new municipal library and a childcare centre.

After the profitable supply of the refurbishment of the 52,000 sqm Pullman Montparnasse resort, operated by Accor, in H2-
2021, and a 13,000 sqm workplace venture in H1-2022, totally let to Accor Group’s co-working operator Wojo, the Group inaugurated the ultimate a part of Les Ateliers Gaîté venture, a three-floor 28,800 sqm procuring and way of life vacation spot, over 90% let.

6. Disposals

In July 2022, URW accomplished the disposal of Gera Arcaden, closed the sale of Almere Centrum, Carré Sénart Shopping Parc and URW’s companion in Aupark exercised its name possibility for the acquisition of an extra 27% stake. On September 30, 2022, URW accomplished the sale of Villeneuve 2.

With these transactions, URW has accomplished €3.2 Bn of its €4.0 Bn European disposals programme. The Group stays in energetic discussions with potential patrons on mature workplace and retail belongings that aren’t core to its technique. Given present market situations, the Group now expects to finish the European disposals programme in 2023.

In the US, URW introduced the sale of Westfield Santa Anita, a regional procuring centre, in August for $537.5 Mn (at 100%, URW share 49%).

The Group is in energetic discussions in relation to its regional belongings and continues to work actively on its Flagship belongings. Turnover, leasing and emptiness metrics reinforce the desirability and intrinsic worth of those belongings.

URW is dedicated to finishing its deleveraging programme by way of the unconventional discount of its monetary publicity to the US. The efficiency of the Group’s belongings, in addition to its sturdy liquidity place, will permit URW to pursue this plan in an organised and well timed method.

7. Financial sources

As at September 30, 2022, the Group’s web monetary debt¹² decreased to €23.3 Bn (from €24.1 Bn as at June 30, 2022) and the money available¹³ elevated to €3.0 Bn (from €2.4 Bn as at June 30, 2022), supported by the disposals achieved in Q3-2022.

Since finish of September, the Group has signed €550 Mn of sustainability-linked time period loans with a 5-year maturity (together with the refinancing of €150 Mn debt maturing in January 2023).

This extra liquidity will additional strengthen the Group’s money place to €3.4 Bn¹³. This compares with €3.2 Bn of debt maturing by December 2024 and €4.5 Bn together with the hybrid with a 2023 name date.

In addition, as at September 30, 2022, the Group’s credit score strains totally undrawn place amounted to €10.0 Bn together with €3.7 Bn maturing over the following twelve months. URW is contemplating alternatives to increase or renew a part of these strains.

Taking into consideration this liquidity and undrawn credit score services and due to its long-dated debt maturity, the Group has secured greater than 36 months of financing wants¹⁴ (assuming the reinstatement of a dividend for fiscal 12 months 2023 and the reimbursement of the 2023 hybrid).

Thanks to improved operational efficiency and debt discount, the Net debt/EBITDA ratio^15/16 improved from 11.0x on June 30, 2022 to 10.4x on September 30, 2022. The ICR¹⁶ remained steady between H1-2022 and 9M-2022 at 4.5x.

Furthermore, the Group’s debt is totally hedged for the approaching years, with hedging devices and glued debt of greater than €20.0 Bn over 2022-2025 and of over €15 Bn in 2026.

         8. ESG

The sustainability management of URW has been recognised externally by its long-term presence within the prime quartile of all ESG rankings. URW ranks 1^st in the whole Real Estate sector¹⁷ in keeping with Sustainalytics. In Q3-2022, URW renewed its AAA from MSCI ESG ranking, constantly since 2014, and acquired for the 11^th time a ‘5 Star’ ranking within the Global Real Estate Sustainability Benchmark (GRESB), which recognises entities positioned within the prime 20%.

The firm has already achieved a -27% discount of its whole carbon footprint since 2015¹⁸, and is on monitor to attain its goal of a -50% discount by 2030 by implementing a variety of initiatives resembling the provision of its belongings with renewable electrical energy for frequent use. With a 15% discount of its power depth globally since 2015, URW can also be on monitor to succeed in its goal of completely lowering its whole power depth by -30%. In the context of the present power disaster, URW has introduced it’ll enhance its power effectivity in Europe by an extra -15%. This features a -20% discount for France, past necessities, and additional elevated its energy-saving strategy throughout all of its procuring centres to help wider authorities and personal sector efforts to deal with the European power disaster.¹⁹

The current supply of Les Ateliers Gaîté represents a residing instance of URW’s sustainability ambition, demonstrating sturdy efficiency with a 40% discount in power used for heating. This will end in 880 tonnes of prevented CO₂ emissions annually.

      9. Outlook

Based on the efficiency of the primary 9 months of 2022, together with a powerful Q3 that confirms the optimistic development seen in H1, the Group is upgrading its 2022 AREPS steerage from a minimum of €8.90 to a minimum of €9.10 per share.

The Group assumes no main COVID-19 or energy-related restrictions, or any main disruption to the macro-economic surroundings. 

10. Financial schedule

The subsequent monetary occasions within the Group’s calendar will probably be:

February 9, 2023: 2022 Full-Year Results (earlier than market opening)
April 26, 2023: Q1-2023 buying and selling replace
May 11, 2023: AGM Unibail-Rodamco-Westfield SE

For additional data, please contact:

Investor Relations
Audrey Arnoux
+33 6 61 27 07 39
[email protected]

Media Relations 
UK/Global:
Cornelia Schnepf – FinElk
+44 7387 108 998

[email protected]

France:
Nathalie Feld – Image 7
+33 6 30 47 18 37
[email protected]

About Unibail-Rodamco-Westfield

Unibail-Rodamco-Westfield is an proprietor, developer and operator of sustainable, high-quality actual property belongings in probably the most dynamic cities in Europe and the United States.

The Group operates 80 procuring centres in 12 international locations, together with 45 which carry the long-lasting Westfield model. These centres appeal to over 800 million visits yearly and supply a singular platform for retailers and types to attach with customers. URW additionally has a portfolio of high-quality places of work, 10 conference and exhibition venues in Paris, and a €3 Bn growth pipeline of primarily mixed-use belongings. Currently, its €55 Bn portfolio is 87% in retail, 6% in places of work, 5% in conference and exhibition venues, and a couple of% in companies (as at June 30, 2022).

URW is a dedicated companion to main cities on city regeneration tasks, by way of each mixed-use growth and the retrofitting of buildings to industry-leading sustainability requirements. These commitments are enhanced by the Group’s Better Places 2030 agenda, which strives to make a optimistic environmental, social and financial influence on the cities and communities the place URW operates.

URW’s stapled shares are listed on Euronext Amsterdam and Euronext Paris (Ticker: URW), with a secondary itemizing in Australia by way of Chess Depositary Interests. The Group advantages from a BBB+ ranking from Standard & Poor’s and from a Baa2 ranking from Moody’s.

For extra data, please go to www.urw.com

¹ Restated for disposals.
² Proportionate displays the influence of proportional consolidation as an alternative of the fairness methodology required by IFRS 11 of the URW collectively managed belongings.
³ Service cost revenue are included within the turnover to totally adjust to IFRS 15. The figures for 9M-2021 had been restated accordingly for a complete quantity of €236.2 Mn below IFRS and €281.4 Mn below Proportionate.
⁴ From an accounting standpoint, Gross Rental Income (“GRI”) consists of the COVID-19 hire reductions, indexation, emptiness influence, and variable revenues, whereas uncertain debtor provisions are a part of the property working bills.
⁵ Footfall for all centres in operation, together with extensions of current belongings, however excluding deliveries of recent brownfield tasks, newly acquired belongings and belongings below 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 just isn’t managed by URW. For the US, footfall solely consists of the 22 centres for which a minimum of one 12 months of comparable information is offered.
⁶ Tenant gross sales for all centres (besides The Netherlands) in operation, together with extensions of current belongings, however excluding deliveries of recent brownfield tasks, newly acquired belongings and belongings below heavy refurbishment (Ursynow, Westfield La Part-Dieu, Les Ateliers Gaîté, CNIT, Gropius Passagen, Garbera and Westfield Valley Fair). Excludes Zlote Tarasy as this centre just isn’t managed by URW. Excludes Carrousel du Louvre. Excludes Auto department for Europe and Auto and Department Stores for the US.
⁷ Retail solely, belongings at 100%. MGR + CAM within the US. As at October 21, 2022.
⁸ Restated for disposals.
⁹ Excluding airports.

¹⁰ Group determine (Europe + US) on a proportionate foundation. Commercial Partnerships consists of each the brand new Media, Brand & Data Partnerships division introduced in the course of the Investor Day, in addition to kiosks, seasonal markets, pop-ups, and automotive park activations (“retail & other income”).
¹¹ At 100%.

¹² On a proportionate foundation. After influence of by-product devices on debt raised in foreign currency echange. Excluding monetary leases accounted as debt below IFRS 16 and companions’ present account. Excluding Hybrid securities that are accounted for as fairness.
¹³ On a proportionate foundation.
¹⁴ Based on the present money place, the €550 Mn newly signed time period loans, the undrawn credit score strains (topic to covenants), estimated retained revenue web of assumed dividend, capex and debt maturities.
¹⁵ On final 12-months foundation.
¹⁶ On an IFRS foundation.
¹⁷ Ranking retrieved from www.sustainalytics.com, Last replace Oct. seventh 2021.
¹⁸ Compared to 2015 baseline, recalculated to take away the influence of COVID together with corrections with footfall and interval of closures.

¹⁹ Please confer with press launch of August 3, 2022 “Unibail-Rodamco-Westfield expands reduction targets to support national and European efforts to address energy crisis”.

• URW Q3-2022 TRADING UPDATE