Unibail-Rodamco-Westfield has seen its net result fall by 29.5% year-on-year in its nine month results, with pandemic protocols continuing to impact its global portfolio.
While office income year-on-year fell just 1.3% in like-for-like terms, its shopping centres saw net rental income slide by 12.3%. However, URW's worst performing segment remains its convention and exhibition portfolio, where income has slumped by a massive 88.7%.
Across Europe, tenant sales are holding up better than footfall, supporting an industry-wide trend of larger basket sizes. URW reported that tenant sales were down just 15% in September in Continental Europe, recorded a 19% fall in Europe, and dropped 17% in the US for opened stores. This compared favourably to lower footfall figures of -21% in Continental Europe and -24% in Europe.
Collection rates improved in the third quarter of the year. After reaching 95% in Q1, 52% in Q2 and 79% in Q3 - of which 91% was in Continental Europe - URW warned that new restrictions in place in Europe may affect further recovery and Q4 results.
Said Christophe Cuvillier, group CEO: 'In October, a worrying increase in Covid-19 infections has led to a return of government restrictions, including renewed lockdowns, hence adding further uncertainty.
'These extraordinary challenges reaffirm the necessity of the group’s €9+ Bn Reset plan, to immediately strengthen the capital structure and reduce risk.'
The quarter saw URW achieve disposals of €0.6 bn with the sale of the SHiFT office building in October. URW said it had also scaled back its development pipeline to €5.4 bn, €2.9 bn less than planned as of 31 December 2019.
'Taking into account the new restrictive measures in place and their impact on the Group’s operations, URW currently expects its 2020 AREPS to be between €7.20 and €7.80 per share,' Cuvillier added. 'For 2021, the Group expects like-for-like retail NRI to grow by between +15 and +20% on a cash basis versus that expected for 2020.'
URW's next challenge will arrive on 10 November, when shareholders are due to vote on a €3.5 bn capital raise that forms the backbone of the board-backed Reset strategy. A rebel consortium led by ex-Unibail CEO Leon Bressler continues to defy the plan.
