Unibail-Rodamco lifts rental income on strong mall performance

Europe's largest listed property group Unibail-Rodamco boosted its net rental income by 5.6% to €1.35 bn in 2013 as a strong performance from its shopping centre business offset a decline in the office and exhibition units.

Despite what it described as a 'negative macro-economic backdrop', the company lifted rental income from its core shopping centre business by 8.9% to €1.1 bn compared with the year-earlier period, or 4.7% on a like-for-like basis.

The growth reflected Unibail-Rodamco's focus on 'high footfall, superior quality shopping and leisure destinations throughout Europe's wealthiest cities,' board chairman and CEO Christophe Cuvillier said.

By contrast, rental income from the group's office business where rents remain under pressure, fell 7.4% to €160 mln (from €173 mln), while the conventions and exhibitions activities posted a 4.5% drop in income to €96 mln (from €100 mln).

The strong like-for-like growth in the shopping centre business helped boost recurring net earnings, which were up 11.2% at €986 mln from €886 mln in 2012. Recurring earnings per share grew by 6.5% to €10.22.

The overall value of Unibail-Rodamco’s portfolio increased to €32.1 bn last year, up from €29.1 bn at end-2012, as the company added 200,000 m² of gross leasable area (GLA) in € 1.1 bn of new projects. The additional space included extensions of Cerny Most (Prague), Alma (Rennes), Toison d'Or (Dijon), Shopping City Süd (Vienna) and the new shopping centre Aéroville near Paris Charles de Gaulle airport.

Unibail-Rodamco said its average cost of debt hit a new record low of 2.9% at end-2013, down 50 bps on 2012, giving the group a loan-to-value ratio of 38%.

The company is upbeat on its expectations for rental income growth in 2014, based on ongoing strong fundamentals such as low vacancy, sustainable occupancy cost ratios and good rental uplifts. Barring a change in the economic outlook, the group expects to achieve a REPS growth in 2014 of at least 5.5%.

For Unibail-Rodamco’s full 2013 results, click on the attachment below.