Unibail-Rodamco, Europe’s biggest property investor, wrote off EUR 1.9 bn or 8.2% on its portfolio in the first half of 2009, valuing its assets at EUR 22.8 bn, the company reported on Wednesday. The devaluation brings the total asset write-down over the last 12 months to EUR 3.7 bn or 16%. Excluding positive H1 rental income growth, the writedown for the past year comes to EUR 4.7 bn, or 20% of the portfolio.
Unibail-Rodamco, Europe’s biggest property investor, wrote off EUR 1.9 bn or 8.2% on its portfolio in the first half of 2009, valuing its assets at EUR 22.8 bn, the company reported on Wednesday. The devaluation brings the total asset write-down over the last 12 months to EUR 3.7 bn or 16%. Excluding positive H1 rental income growth, the writedown for the past year comes to EUR 4.7 bn, or 20% of the portfolio.
The retail investment specialist posted recurring earnings per share in line with expectations at EUR 4.68, an increase of 7.8%, and reiterated its aim for EPS growth of at least 7% this year.
Unibail-Rodamco said all sectors (retail, office and conventions & exhibitions) contributed to the earnings growth. Retail benefited from the strong position of its shopping centres, with a low vacancy rate (2% versus 1.8% end-2008), and a 4.5% like-for-like growth in net rental income. Following divestments in 2008, the office sector saw a decrease in rental income, but like-for-like income grew by 10.1%, of which 7.3% from indexation. The vacancy rate in the office sector dropped to 4.7% after the successful letting of 20,500 m2 to rail company SNCF in mid-July.
Total net rental income amounted to EUR 634 mln in H1, an increase of 5.9% on a like-for-like basis. Unibail-Rodamco said the Loan to Value ratio increased slightly to 33% at end-June from 30% at year-end 2008. This was mostly driven by declining asset values.
The group said it will continue to invest in its development pipeline, having raised its return criteria to reflect the current market situation. 'It [Unibail-Rodamco] remains alert to opportunities which may be triggered by the current economic climate,' the company said in a statement.
In a statement, CEO Guillaume Poitrinal said the company had not cancelled any significant projects and that it is still looking for new projects. He added, however, that the market is currently 'unbalanced' with more sellers than buyers. 'How long that will last I really have no clue. Values have been going down for 12 months in a significant way.'
