Westfield reports 14.2% decline in global net rental income

Westfield Stratford
Westfield Stratford, June 2020. Image: ©TheIndustry.fashion

Property giant Unibail-Rodamco-Westfield, owner of Westfield London and Westfield Stratford shopping centres, has reported a 14.2% decline in global net rental income, with a 34.1% decline in net rental income the UK.

In mid-March, almost all of Westfield shopping centres were forced to close globally (excluding select essential retailers), on average centres being closed for 67 days.

Footfall in European centres showed an encouraging recovery. In regions that reopened 11 to 12 weeks ago, footfall is reportedly trending at 80–90% of the same period in 2019.

As of 20 June, 97% of the stores within the group’s European centres had reopened.

In the UK, the lockdown only ended on 15 June, with restrictions still in place for leisure operators, and people strongly encouraged not to return to offices or take public transport until at least late July, footfall is now approaching 50% for the same period in 2019.

The rent collection for the shopping centre division in H1 came to 67% (94% for Q1, 38% for Q2). 3% of the Q2 rents have been forgiven through rent relief, 20% has been deferred, either by agreement or by application of law, and 39% is overdue and to be recovered.

The Group announced it expects an improvement following completion of ongoing tenant negotiations regarding COVID-19 assistance, with negotiations conducted on a case by case basis on the principle of a fair sharing of the burden, and include a request for concessions from tenants.

Leasing activity has been heavily affected by the pandemic, with only 661 leases signed group-wide, down 44% compared with the same period in 2019.

Westfield also confirmed it has also agreed a partnership with Zalando to enhance customers’ digital experience and improve its tenants omni-channel capabilities in Germany, Sweden, Poland and Spain.

Christophe Cuvillier, Group Chief Executive Officer, said: “The first half of 2020 marked an unprecedented time that has impacted URW, as it has everyone. After the reopening, the footfall and sales have been recovering better than anticipated. This shows our centres continue to be attractive destinations for people to visit and will see further increases in activity as life returns to normal.

During the crisis, URW successfully focused on preserving liquidity, by raising funds on the debt markets, deferring non-essential CAPEX, reducing the pipeline, cancelling the final dividend and implementing cost savings.

The Group now has a record €12.7 billion of cash and undrawn credit facilities available. Despite the adverse conditions, the Group successfully closed the disposal of a 54.2% stake in a portfolio of five French centres. These accomplishments during such a difficult period prove the resilience of URW and the extraordinary work of our teams, to which I extend my admiration and gratitude.”

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