Westfield announces €9.0+ billion reset plan to strengthen balance sheet

Unibail-Rodamco-Westfield, the operator of destinations including Westfield London and Westfield Stratford, has announced a €9.0+ billion reset plan to strengthen its balance sheet and increase financial flexibility to execute its long-term strategy.

Key highlights of the reset plan and its five strategic priorities are:

RESTORE financial strength through a €9.0+ billion deleveraging plan consisting of:

• • A fully underwritten €3.5 billion capital raise to be used to immediately reduce leverage;
  • Limiting cash dividends through scrip and/or a lower payout ratio, resulting in €1.0 billion cash savings over the next two years;
  • A further €0.8 billion reduction in development and non-essential operating capex;
  • €4.0 billion of disposals expected to be completed by year-end 2021.

EXECUTE the €4.0 billion asset disposal programme

• • Acceleration of the previously announced disposal plan by outright sales of non-strategic assets across all asset classes, on the back of the Group’s proven track record;
  • A €6.0+ billion identified pool of assets;
  • €1.0 billion of disposals are well advanced.

STREAMLINE operations and footprint to enhance agility and optimise use of resources

• • Further reduce capex by c.€800 million, of which c.€600 Mn of development capex and c.€200 million of non-essential operating capex. The development pipeline has been reduced by €2.2 billion compared to FY-2019;
  • Simplify structure and reduce gross admin expenses further.

EMBRACE a changing environment

• • Accelerate its Flagship destination strategy;
  • Capture the mixed-use potential embedded within the portfolio, leveraging URW’s multi-disciplinary platform and third-party capital;
  • Capitalise on a highly diversified and flexible pipeline.

THRIVE by harnessing URW’s powerful portfolio to grow new revenue streams

• • Increase appeal and audience of URW’s Flagship destinations;
  • Monetise the value proposition and Flagship destination audience by developing digital and omni-channel services;
  • Generate new non-rent based revenues of €150 million per year by 2025;
  • Develop additional revenues by developing “asset light” and “capital light” partnerships building on the Westfield brand.

Commenting on the announcement, Christophe Cuvillier, Group Chief Executive Officer, said: "Our €9+ billion “RESET” plan is designed to allow URW to fully embrace the changing retail environment through our Flagship destination strategy and capitalise on our unmatched portfolio quality’s mixed-use potential. On the operational front, we see continued improvement in footfall and tenant sales, and are making steady progress in our tenant negotiations.

"As the environment remains challenging, we believe today’s announcement, including the fully underwritten capital raise, is an important step to ensure URW is best positioned for the future."