Unibail-Rodamco-Westfield continues to recover in Q1

By

Sandra Halliday

Published
Apr 28, 2022

Shopping malls giant Unibail-Rodamco Westfield saw turnover rising 34.2% in Q1, reflecting a “strong post-Covid-19 recovery and asset deliveries”.

The company owns mega-malls such as the two Westfields in London and the Netherlands, Forum des Halles and Carrousel du Louvre in Paris, Plaza Bonita and Fashion Square in the US, plus many, many more.

It said its tenant sales recovered and reached 93% of 2019 levels in the first three months of the year as well as 95% in March alone.

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Importantly for the business, rent collection also improved to 93% for Q1, with a “continued increase in the 2021 collection rate”.

So what did that all mean in monetary terms? Turnover reached €897.1 million on a directly comparable basis. Turnover at shopping centres was up 28.7% at €733.3 million and within this, gross rental income rose 31.7% to €622.4 million.

The group saw “sustained leasing activity” with 521 deals signed in in the period, which was actually up 4% against 2019. Meanwhile, the proportion of long-term deals increased to 60%.

The company added that it continued to streamline its US portfolio with the sale of Promenade Mall land plot at a 60% premium to its latest appraisal. And its European disposal programme progressed with the disposal of Solna Centrum, a 45% stake in Westfield Carré Sénart completed and agreement for sale of Gera Arcaden signed.

CEO Jean-Marie Tritant said: “Our portfolio of flagship destinations in the wealthiest cities and catchment areas performed well in Q1, demonstrating the continued strength of the recovery. The vital role our centres play in the omnichannel strategy of leading brands was illustrated by strong leasing performance.”

As mentioned, sales edged ever closer to 2019 levels and the March figure (+95%) was even higher at 97% when excluding central business districts, which were still impacted by work from home.

Due to “more productive visits”, sales continue to outperform footfall, which came to 82% of 2019 levels in Q1 and 84% in March so those shoppers who did turn up were clearly spending more. 

That said, in Europe, sales remained affected by restrictions and came to 89% of 2019 levels in Q1 as a whole, with figures improving to 91% in March. The Omicron wave had an impact during the quarter with a lockdown in The Netherlands as well as some restrictions in other countries, including guidance to work from home, capacity restrictions, plus restrictions for non-vaccinated people and mask mandates, holding back the recovery. 

But The Netherlands benefited from the delivery of the new Westfield Mall in March 2021. Meanwhile results for the Nordics were affected by the disposal of Solna Centrum in February 2022. 

Sales in Germany and Austria, which had more stringent restrictions, remained more impacted, while Central Europe and the Nordics performed well at 96% and 93%. 

The UK showed an improvement from 84% in Q4 to 89% in Q1. 

And in the US, sales continued to be consistently above 2019 levels, reaching 102% in Q1 and 104% in March. This strong performance “confirms the positive trend seen in 2021”.

In the US, the group also saw a positive FX impact, partly offset by the foreclosure of Sarasota, Broward and Palm Desert and remaining rental abatements for tenants in the airport business.