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Westfield sees end of "COVID effect" as tenant sales rise

Tom Shearsmith
09 February 2023

Unibail-Rodamco-Westfield, owners of Westfield Shopping Centres, saw 2022 tenant sales reach 103% compared in pre-pandemic 2019 levels, citing the "end of any COVID effect" on its business.

Tenant sales reached 100% in Europe and 108% in the US, suggesting consistent improvement across all operating metrics since 2019. Global rent collection is reported at 97%, in line with 2019 levels.

Other financial highlights include:

  • Shopping centre vacancy at 6.5% (compared to 8.9% in June 2021 or 5.4% in December 2019).
  • €441m of minimum guaranteed rent signed, an uplift of 6.2% including 14.4% on long-term deals.
  • 51% increase in commercial partnerships revenues to €175m with strong growth in European advertising, brand and data activities.
  • €2.8 billion of disposal transactions in 2022, with €1.6 billion for Europe and €1.2 billion for the US.
  • Refinancing needs secured for the next 36 months with €13.0 billion of cash on hand and available facilities.

Jean-Marie Tritant, Chief Executive Officer, said: “URW achieved excellent financial results in 2022, confirming the end of any COVID effect on our business. In particular, tenant sales and rent collection returned to pre-pandemic levels and we delivered consistent improvement in operating metrics across all regions.

“Our proactive leasing strategy yielded a higher proportion of longer-term leases at increased rents while we also benefitted from Sales Based Rents and the positive impact of indexation. In 2023, we will perform as retailers and brands optimise their store networks with us, with a focus on the most productive stores in prime locations as part of their drive-to-store strategies.

“Strong growth in Commercial Partnerships revenues clearly demonstrated the opportunity to generate new revenues from qualifying the audience of visitors to our centres, especially in Europe where we launched Westfield Rise, an in-house media advertising agency.

“The Group is on track to deliver its “2024 and beyond” strategy, which includes maximising asset value through the disciplined delivery of our committed pipeline and unlocking new development opportunities, with a focus on urban regeneration and environmental transition projects.”

Westfield Rise was launched in late 2022 as a new in-house media, brand experience and data partnerships agency. The agency serves as a "one-stop-shop" for brands and media-buyers to create innovative campaigns across URW’s platform of retail media assets at its 57 shopping malls in Europe.

In June 2022, Unibail-Rodamco-Westfield and Ministry of Sound Group announced the signing of an agreement to open The Ministry Shepherd’s Bush, a new concept combining workspace, a multi-studio fitness offer and a rooftop bar and restaurant, in the space currently occupied by House of Fraser.

March 2023 will see the opening of Sephora's first UK retail location, debuting at Westfield London.

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