A steep decline in rental revenues from Unibail-Rodamco's shopping centre business in the Netherlands dampened the pan-European real estate giant's overall earnings for the first three months of 2017.
Overall turnover from Unibail-Rodamco's shopping centres grew by 3.7% to €360.8 mln over the period, but a 17.5% fall in gross rental income in the Netherlands was in stark contrast to improvements elsewhere in the portfolio. Rental income from the company's Spanish shopping centres business, for example, rose 9.2%, while mall income in the Nordic countries grew by 6.7%.
According to a company statement, the gross rental income (GRI) in the Netherlands 'was affected by the lingering effects of the bankruptcies in 2016 (primarily V&D), the resolution of a long-standing dispute with a tenant and the impact of the Mall of the Netherlands project'.
V&D (Vroom & Dreesmann) was a Dutch chain of department stores which went bankrupt on 31 December 2015, although its branches were still in operation until February 2016.
Unibail-Rodamco's Leidsenhage centre is currently undergoing an extensive refurbishment to transform it into the Mall of the Netherlands (pictured), designed by MVSA Architects. The project, worth nearly €500 mln, won't be completed until 2019.
Disposals versus sales
The real estate giant's office division also suffered, with income falling by a total of 22.1% compared with the same period of 2016, particularly in France, where rents shrank by 24.3%.
This was due to the disposal of four office buildings, including 2-8 Ancelle, So Ouest Office, 70-80 Wilson and Nouvel Air, and was also affected by the refurbishment project of Issy Guynemer.
However, the GRI of its Convention & Exhibition division increased by 3.8% to €64 mln and total tenant sales in Unibail-Rodamco's shopping centres grew by 1.8% year-on-year, with a particularly impressive performance in Central Europe, where they rose 5.5%. France and the Nordics posted growth of +2.7% and +2.6%, respectively.
