Unibail-Rodamco-Westfield (URW), one of the largest mall operators in the world, has released its Q1 update, revealing the significant impact of Covid-19 restrictions on its international operations. Over the first three months of the year, the company saw a staggering 40.8% decline in total turnover, amounting to €566.7 million on a ‘proportionate’ basis. The gross rental income (GRI) of URW’s shopping centre division also took a hit, falling by 30.4% to €472.8 million.

The performance of URW’s various markets varied during this period. While the Nordics, Spain, and the US experienced slight improvements, with respective declines of 14.5%, 20.4%, and 20.9%, France, the UK, and Germany fared much worse. These countries faced declines of over 36%, almost 60%, and over 46% respectively.

URW faced significant challenges during the quarter, with 42 days of enforced closures across its operations. Although some non-essential retail restrictions were lifted in certain countries in April, such as the UK, Slovakia, Denmark, and the Netherlands, 51% of the company’s shopping centres remain closed. Despite these setbacks, URW remains optimistic about the future and expects to see a recovery in trading once restrictions are lifted.

There were some positive signs throughout the quarter. In March, tenant sales in the US reached 87% of 2019 levels, while Continental European countries that allowed non-essential retail achieved between 76% and 81% of 2019 levels. URW observed that tenant sales appeared to be recovering in operational malls, with 11 shopping centres even surpassing 2019 levels.

Furthermore, footfall also showed encouraging signs in certain locations. In the UK, footfall reached 75% of 2019 levels during the first week of reopening, with Westfield London experiencing 85% footfall. URW also celebrated the successful opening of the Westfield Mall of the Netherlands, which was 92% pre-let and received 70,000 visits during its first weekend, despite limited access to non-essential retail and entertainment.

URW’s CEO, Jean-Marie Tritant, remains cautiously optimistic about the future. He acknowledges the challenging year ahead due to ongoing restrictions and the lagged impact of the pandemic on retailers. While leasing activity has shown promise in preparation for a post-Covid-19 market rebound, URW’s overall vacancy rate slightly increased in Q1. The company continues to work closely with its tenants to navigate through this difficult environment. Tritant emphasized that whenever restrictions are eased, there are positive signs of a return to normality driven by pent-up consumer demand for high-quality shopping destinations.

Useful links:
1. URW Q1 2021 Earnings
2. URW Official Website