Paris, Amsterdam, February 12, 2020
Press release
UNIBAIL-RODAMCO-WESTFIELD, THE PREMIER
GLOBAL DEVELOPER AND OPERATOR OF FLAGSHIP DESTINATIONS, EXCEEDS
GUIDANCE FOR FY-2019
Adjusted Recurring Earnings per Stapled
Share (“AREPS”) of €12.37 exceed guidance of €12.10 -
€12.30
- Very strong Group tenant
sales growth through December 31, of
+3.7%, of which +4.7% in Europe
and +1.6% in the US
- Net Rental Income (NRI)
like-for-like (Lfl)(1) growth: +3.1% in Shopping
Centres in Continental Europe and -4.2% in
the UK; comparable Net Operating Income (NOI)(2) of
+2.4% (+5.4% in
Flagships) in the US
- Continental European rental uplift:
+12.0% (+13.9% in Flagships)
- Average cost of debt:
1.6%; average debt maturity extended to a
record 8.2
years
- EPRA NAV:
€213.30/stapled share
- Development pipeline scaled back to
€8.3 Bn
- Disposals: €2.8 Bn agreed
or closed, bringing total disposals proceeds since June 7,
2018, to €4.8 Bn
- LTV: 38.6% (37.2%
pro-forma for the disposal of five French assets)(3)
- Dividend proposed:
€10.80 per stapled share
- 2020 AREPS
Outlook: reflecting solid underlying growth in a
challenging market, offset by the impact of disposals completed in
2019 and those to be completed in 2020 (around 50 cents per share),
AREPS expected to be in the range of €11.90 -
€12.10.
“The retail environment remains challenging, but
URW’s high quality portfolio saw a very strong +3.7% growth in
Group tenant sales. This, with the exceptional work of our teams,
drove LfL NRI growth of +3.1% in Continental Europe, and comparable
NOI up by +5.4% in our US Flagships. Adjusted recurring EPS at
€12.37 exceeded the 2019 guidance increased in July. The Group
remains soundly positioned for the future. We will continue the
execution of our strategy of concentration, differentiation and
innovation and a disciplined approach to the allocation of capital
and deleveraging. With the announcement made today of the disposal
of a 54.2% stake in a portfolio of five French centres, we have now
agreed disposals of €4.8 Bn since June 2018 (80% of our €6 Bn
target) and have scaled back our development pipeline to €8.3 Bn
while maintaining its potential for value creation. The integration
of Westfield is running according to plan, having already achieved
€99 Mn of cost and revenue synergies, and we have extended to the
UK and the US our widely recognised and industry leading CSR
strategy, Better Places 2030. AREPS will continue to be impacted in
the near term by the disposal of assets, but our 5-year Business
Plan implies underlying operational growth of +3% to +5%. This
underpins our minimum €10.80 dividend per stapled share going
forward.”Christophe Cuvillier, Group Chief Executive
Officer
|
FY-2019 |
FY-2018 |
Growth |
Like-for-like growth |
Net Rental Income (in € Mn) |
2,491 |
2,161 |
+15.3% |
+3.0% |
Shopping Centres |
2,293 |
1,912 |
+19.9% |
+3.1% |
France |
663 |
647 |
+2.5% |
+2.8% |
Central Europe |
223 |
212 |
+5.4% |
+4.0% |
Spain |
157 |
155 |
+0.8% |
+10.5% |
Nordics |
123 |
141 |
-13.3% |
-2.6% |
Austria |
111 |
108 |
+3.5% |
+2.5% |
Germany |
143 |
140 |
+2.8% |
+0.0% |
The Netherlands |
62 |
59 |
+5.8% |
+10.7% |
United States |
653 |
351 |
n.m. |
n.a. |
United Kingdom |
157 |
99 |
n.m. |
n.a. |
Offices & others |
103 |
149 |
-30.9% |
-1.2% |
Convention & Exhibition |
95 |
100 |
-4.7% |
+3.4% |
|
|
|
|
|
Recurring net result (in € Mn) |
1,760 |
1,610 |
+9.3% |
|
Recurring EPS (in €) |
12.72 |
13.15 |
-3.3% |
|
Adjusted Recurring EPS (in €) |
12.37 |
12.92 |
-4.3% |
|
|
|
|
|
|
|
Dec. 31, 2019 |
Dec. 31, 2018 |
Growth |
Like-for-like growth |
Proportionate portfolio valuation (in € Mn) |
65,341 |
65,201 |
+0.2% |
-1.8% |
Going Concern Net Asset Value (in € per stapled
share) |
217.50 |
233.90 |
-7.0% |
|
EPRA Net Asset Value (in € per stapled share) |
213.30 |
221.80 |
-3.8% |
|
EPRA Triple Net Asset Value (in € per stapled
share) |
199.20 |
210.80 |
-5.5% |
|
Figures may not add up due to rounding
FY-2019 AREPS OF €12.37
Reported AREPS was €12.37 vs. the guidance of
€11.80 to €12.00 for 2019, increased to €12.10 to €12.30 at
half-year. The 2019 result reflects the full-year effect of the
Westfield transaction and the impact of the disposals completed in
2018 and 2019 (€3.3 Bn), which was partially offset by the Group’s
solid operating performance and the implementation of IFRS 16.
RESILIENT OPERATING PERFORMANCE
Shopping Centres - Continental
EuropeFootfall in the Group’s centres through December was
up by +2.6%, and by +3.0% for Flagships. In France, footfall was up
by +4.6% (+431 bps vs. the CNCC index), despite the impact of the
public transport strikes of December 2019 in the Paris region.
Through November 30, tenant sales increased(4)
by +5.2%, and by +5.5% for Flagships,(5) outperforming national
sales indices(6) by +304 bps and +340 bps, respectively. In France,
tenant sales increased by +5.4%, outperforming the IFLS index by
+379 bps and the CNCC index by +459 bps. Germany also did
especially well ( +4.4%), outperforming the national sales index by
+86 bps. The Nordics, up by +14.1%, was boosted by the outstanding
performance of Tesla in its two stores in URW’s Stockholm centres.
Excluding Tesla, the Group’s Continental European tenant sales
through November 30 increased by +3.3%.
Lfl NRI grew by +3.1%, +150 bps above
indexation. The Group signed 1,367 leases with a Minimum Guaranteed
Rent (MGR) uplift of +12.0% (+13.9% for Flagships). The rotation
rate amounted to 10.6% in line with URW’s objective of 10%. The
EPRA vacancy remains limited at 2.5% and down from 2.8% as at June
30, 2019.
United KingdomFootfall through
December 31 was up by +2.8%, outperforming the UK shopping centre
index by +530 bps. Tenant sales through December 31 increased by
+4.7%, and through November 30 by +5.3%, outperforming the national
sales index by +550 bps. MGR uplift was solid at +11.1%. EPRA
vacancy stood at 7.7%, down from 8.7% as at June 30, 2019.
United States Tenant sales(7)
increased by +1.7% through November 30, of which +3.3% in
Flagships, compared to the national sales index of +3.7%(8) (which
includes e-commerce sales). Growth was +1.6% through December 31.
Speciality sales productivity per square foot (psf)(9) increased by
+5.1%. Average letting spreads for Flagships were +4.7%. As at
December 31, 2019, occupancy stood at 94.8% (96.2% in Flagships),
up +140 bps vs. June 30, 2019. Lease commitments of vacant spaces
as at December 31, 2019, amounted to 1.4% of GLA. Comparable NOI
increased by +2.4% (+5.4% for Flagships), improving from -1.6% and
-0.3%, respectively, in 2018.
Offices & OthersThe offices
& others division sold Majunga on very attractive terms and
delivered Versailles Chantiers and Shift. Lfl NRI decreased by
-1.2%, of which -1.5% in France, mainly due to the negative impact
of a renewal.
Convention &
ExhibitionRecurring NOI was up by +11.4% compared to 2017,
and flat compared to 2018 when excluding the impact of the
triennial INTERMAT show held in that year. The new Pavilion 6 and
the Novotel and Mama Shelter hotels at Porte de Versailles were
delivered.
ACCELERATING OUR CSR
STRATEGY
URW’s CSR strategy, Better Places 2030, was
extended to the new regions of the Group (the UK and US). The
Group's ambitious goal of reducing carbon emissions by -50% across
URW’s value chain in Europe and the US by 2030 was reaffirmed.
Better Places 2030 now also tackles new challenges like responsible
consumption, circular economy, biodiversity and community
resilience. URW’s CSR strategy is widely recognized, illustrated by
the prime ISS ESG rating, CDP’s A list and the retail real estate
sector leader award of GRESB.
€99 MN OF COST AND REVENUE SYNERGIES
CAPTURED
By December 31, 2019, the Group had captured
€99.0 Mn of its target of €100 Mn of run-rate synergies, including
€87.9 Mn of cost synergies, as well as the first €11.1 Mn of
revenue synergies (target of €40 Mn by 2023), through its
Commercial Partnerships and International Leasing operations.
Commercial Partnership revenues in Continental Europe grew by
+11.2% to €32.7 Mn.
OPTIMIZING DEVELOPMENT CAPITAL AND
RETURNS
The URW Total Investment Cost(10) of its
development pipeline amounted to €8.3 Bn, down from €11.9 Bn
as at year-end 2018. The Group initiated a full review of its
pipeline and removed €3.2 Bn of projects that require major
redefinition, are significantly postponed due to market or
administrative circumstances, or no longer meet the Group’s return
requirements. The Group retains significant flexibility, with
committed projects of only €2.7 Bn, of which €1.7 Bn already
invested. The pipeline GLA is moving towards more mixed use
projects, split between retail (43%), dining & leisure (17%),
offices (21%), residential (11%), and hotels (8%). €0.6 Bn of
projects were delivered in 2019, including the Westfield Vélizy 2
leisure extension, the Westfield Parly 2 Cinema, Palisade at
Westfield UTC and the Westfield Oakridge transformation. The Group
plans to deliver €2 Bn of projects in 2020, including the
extensions of Westfield Valley Fair and La Part-Dieu and the
Westfield Mall of the Netherlands redevelopment.
NAV EVOLUTION
The Gross Market Value (GMV) of the Group’s
assets as at December 31, 2019, amounted to €65.3 Bn on a
proportionate basis (€65.2 Bn as at December 31, 2018). The
Shopping Centre GMV was €56.5 Bn, down -2.0% on a like-for-like
basis (-1.0% for Flagships). The average net initial
yield (“NIY”) of the retail portfolio remained stable at 4.3%. The
Offices & Others GMV came to €4.2 Bn, up by +6.2% on a
like-for-like basis.
Going Concern NAV per stapled share came to
€217.50 as at December 31, 2019. Adjusted for the impact of the
-€10.15 mark-to-market of the fixed-rate debt and derivatives and
the -€10.80 dividend paid in 2019, Going Concern NAV was up +€4.55
(+2.1%) compared to December 31, 2018.
SUCCESSFUL DISPOSALS TO DATE
Since June 7, 2018, the Group has disposed of
€3.3 Bn of office and retail assets at an aggregate NIY of 4.2% and
5.5%, and a 6.2% and 7.7% premium to the last book values,
respectively. On February 12, 2020, the Group reached an agreement
to dispose of a 54.2% stake in five French shopping centres, with
an offer price at 100% of €2.0 Bn, in line with the last unaffected
book value as at December 31, 2018, and reflecting a 4.8% NIY. Net
Disposal Proceeds for URW are expected to be €1.5 Bn. This amount
will increase as other investors join the Consortium. More details
can be found in the press release of February 12, 2020. Upon
closing of this transaction, the Group will have completed €4.8 Bn
(80%) of its €6 Bn disposal target. A number of discussions are
on-going for further disposals.
AVERAGE COST OF DEBT OF 1.6% AND AVERAGE
MATURITY OF 8.2 YEARS
The average cost of debt for the Group was
stable at 1.6%, representing a blended 0.9% for EUR(11) debt, an
all-time low, and 3.4% for USD and GBP debt. The average debt
maturity came to a record 8.2 years. In June 2019, URW was the
first REIT ever to issue 30-year notes on the Euro bond market
(€500 Mn). The Loan-to-Value (LTV) ratio stood at 38.6% (37.2%
pro-forma for the disposal of the portfolio of five French shopping
centres). The interest coverage ratio was 5.7x. Undrawn available
credit lines amounted to a record €9.2 Bn.
OUTLOOK AND GUIDANCE
The €1.3 Bn of disposals closed in 2019 and
those expected to close in 2020 will further increase the average
portfolio quality and reduce leverage. These disposals will, of
course, have an impact on the Group’s AREPS in 2020 and 2021.
As a result of the solid underlying operating
income growth expected despite the challenging retail environment,
the €2 Bn of deliveries in 2020 and the secured cost of debt,
offset by the estimated impact of the disposals (around 50 cents
per share), the 2020 AREPS is expected to be in the range of €11.90
- €12.10.
The substantial disposals made and planned by
URW are a critical part of its strategy of concentration,
differentiation and innovation, active asset rotation and
deleveraging. However, they mask the underlying trends, which
reflect on-going operational growth, delivery of development
projects (albeit fewer than in the Group’s previous business plan),
and a well managed cost of debt. The output of the 2020-2024
business plan, reflects an underlying compound annual growth rate
of the AREPS, i.e., excluding the impact of the disposals in the
plan, of between +3% to +5%.
This outlook is derived from the annual business
plan process for URW’s operations. This exercise results in annual
growth rates which vary from year to year. Variations in the key
assumptions (indexation, rental uplifts, disposals, timely delivery
of projects, cost of debt, FX and tax) will also cause growth rates
to vary from one plan to the next.
DIVIDEND
The Group will propose a cash dividend
of €10.80 per stapled share for fiscal year 2019, subject
to approval by the Annual General Meetings of
Unibail-Rodamco-Westfield SE and WFD Unibail-Rodamco N.V. (the
AGMs). The total amount of dividends paid with respect to 2019
would be €1,494.5 Mn for the 138,378,605 stapled shares outstanding
as at December 31, 2019. This represents an 87% pay-out ratio of
the adjusted net recurring result of the Group.
The planned payment schedule is:
- An interim dividend of €5.40 per stapled share on March 26,
2020 (ex-dividend date March 24, 2020); and
- A final dividend of €5.40 per stapled share, subject to
approval of the AGMs, on July 6, 2020 (ex-dividend date July 2,
2020).
Based on the outputs of its 2020-2024 business
plan exercise, the Group currently expects to maintain its dividend
for 2020 and 2021 at a minimum of €10.80 per share and grow it
broadly in line with the growth in AREPS thereafter.
FINANCIAL SCHEDULE
The next financial events on the Group’s
calendar will be:March 26, 2020: payment interim
dividendApril 29, 2020: 2020 1st quarter results
(after market close) May 15, 2020: AGM
Unibail-Rodamco-Westfield SEJuly 6, 2020: payment
final dividend, subject to approval of the AGMsJuly 29,
2020: 2020 Half-Year results
For further information, please
contact:
Investor Relations Samuel WarwoodMaarten
Otte +33 1 76 77 58 02 Maarten.Otte@urw.com
Media Relations Tiphaine Bannelier-Sudérie
+33 1 76 77 57 94 Tiphaine.Bannelier-Suderie@urw.com
- Like-for-like NRI: Net Rental Income excluding acquisitions,
divestments, transfers to and from pipeline (extensions,
brownfields or redevelopment of an asset when operations are
stopped to enable works), all other changes resulting in any change
to square metres and currency exchange rate differences in the
periods analysed.
- Comparable NOI is based on Net Operating Income before
management fees, termination/settlement income and straight-line
adjustments, and excluding one-offs. For comparability, recent
project deliveries or centres undergoing significant development
works are excluded.
- Announced on February 12, 2020.
- Tenant sales performance in URW’s shopping 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. For the 2019 reporting
period, shopping centres excluded due to delivery or ongoing works
were Les Ateliers Gaité, La Part-Dieu, CH Ursynow, Garbera and
Gropius Passagen. Primark sales are based on estimates. Les
Boutiques du Palais is now included in the Convention &
Exhibition (“C&E”) segment. Tenant sales data include shopping
centres accounted for using the equity method (Westfield Rosny 2,
CentrO, Paunsdorf and Metropole Zlicin), but not Zlote Tarasy as it
is not managed by URW.
- Continental European Flagship assets are: Westfield Les 4
Temps, Aéroville, Westfield Parly 2, Westfield Vélizy 2, Westfield
Carré Sénart, Westfield Rosny 2, Westfield Forum des Halles,
Carrousel du Louvre, CNIT, Confluence, La Part-Dieu, Villeneuve 2,
Westfield Euralille, Polygone Riviera, La Vaguada, Parquesur,
Bonaire, Splau, La Maquinista, Glòries, Donau Zentrum, Shopping
City Süd, Centrum Cerny Most, Westfield Chodov, Wroclavia, Galeria
Mokotow, Zlote Tarasy, Westfield Arkadia, Aupark, Fisketorvet,
Westfield Mall of Scandinavia, Täby Centrum, Stadshart Amstelveen,
Westfield Mall of the Netherlands, Ruhr Park, Gropius Passagen,
CentrO and Pasing Arcaden.
- Based on latest national indices available (year-on-year
evolution) as at November 2019: France: Institut Français du Libre
Service (IFLS)-excluding food; Spain: Instituto Nacional de
Estadistica; Central Europe: Česky statisticky urad (Czech
Republic), Polska Rada Centrow Handlowych (Poland), Eurostat
(Slovakia); Austria: KMU Forschung; the Nordics: HUI Research
(Sweden), Danmarks Statistik (Denmark); Germany: Destatis-Genesis,
excluding online only operators and fuel sales (Federal Statistical
Office). Including online only sales for France, Spain, the Czech
Republic and Slovakia and excluding online only sales for Germany,
the Nordics, Austria and Poland.
- Total tenant sales excluding department stores and Tesla.
- US Census Bureau November 2019 Advance Monthly Retail Sales,
excludes gas.
- Calculated on the basis of sales psf for specialty tenants,
being stores with <10K sq. ft (ca. 929 sqm), excl. Tesla. For
centres in operation and excluding new brownfield deliveries,
acquired assets and assets under heavy refurbishment (in line with
the URW’s European methodology).
- URW Total Investment Cost (TIC) equals 100% TIC multiplied by
URW percentage of ownership of the project, plus specific own
costs, if any. 100% TIC is expressed in value at completion. It
equals the sum of: (i) all capital expenditures from the start of
the project to the completion date and includes: land costs,
construction costs, study costs, design costs, technical fees,
tenant fitting-out costs paid for by the Group, letting fees and
related costs, eviction costs and vacancy costs for renovations or
redevelopments of standing assets; and (ii) tenants’ lease
incentives and opening marketing expenses. It excludes: (i)
capitalized financial interests; (ii) overheads costs; (iii) early
or lost Net Rental Income; and (iv) IFRS adjustments.
- Including SEK
About Unibail-Rodamco-Westfield
Unibail-Rodamco-Westfield is the premier global
developer and operator of Flagship destinations, with a portfolio
valued at €65.3 Bn as at December 31, 2019, of which 86% in retail,
6% in offices, 5% in convention & exhibition venues and 3% in
services. Currently, the Group owns and operates 90 shopping
centres, including 55 Flagships in the most dynamic cities in
Europe and the United States. Its centres welcome 1.2 billion
visits per year. Present on 2 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 3,600
professionals and an unparalleled track-record and know-how,
Unibail-Rodamco-Westfield is ideally positioned to generate
superior value and develop world-class projects. The Group has a
development pipeline of €8.3 Bn.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 an A rating from Standard & Poor’s and
from an A2 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_groupAccess the URW 2018 report at
https://report.urw.com/2018/
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