URW looks to gain market share as strategy pays off

Westfield’s owner has said it is well-positioned to outperform and gain market share following a year of slimming down the portfolio. Unibail-Rodamco-Westfield CEO, Jean-Marie Tritant, said: “URW is well positioned to outperform and gain market share, as retailers accelerate their “drive to store” strategies.” The group’s rental income rose 45% compared with H1 2021, to €1.14bn. He added that the €55bn retail-focused group had now sold 80% of the €4bn-worth of European properties it had slated for disposal, and at a premium to its last valuation. The streamlining of the US regional portfolio was also continuing with the sale of the Promenade development parcel. Tritant added that URW was “in active discussions on other regional assets”. The sale of the US portfolio is a key part of URW’s plans to deleverage and refocus on flagship European destinations. “Given the quality and strong performance of our assets, we are confident in our ability to delever the company by executing on the radical reduction of our financial exposure to the US,” Tritant said. He added: “We have maintained strict capital allocation, while continuing to deliver major development projects, and our hedging protects us against rising interest rates.” The group said it was fully hedged against rising rates for the next five years. URW said that, “in the context of our operational recovery in this challenging macro-environment”, it was increasing its adjusted recurring EPS guidance from €8.20 – €8.40 to at least €8.90. Tritant said: “Our operational performance in H1-2022 was very strong, with tenant sales reaching pre-COVID levels earlier than expected in Continental Europe.” In fact, tenant sales in Q2 exceeded 2019 levels, although for the half they were just 91% in the UK. Vacancy levels also fell to just 6.9% overall, but 9.7% for the UK. However, that is still down from 10.6% for the first half of 2021. “We are seeing strong leasing demand, with retailers expanding with us thanks to the quality of our assets, which are located in the best catchment areas and have an affluent customer base,” Tritant added.