Unibail-Rodamco-Westfield (URW), a malls conglomerate based in France, has announced impressive performance for the first half of the year, with tenant sales in Q2 surpassing pre-Covid levels. The company, known for its ownership of the Westfield malls chain and other major properties worldwide, has experienced a recovery across all business divisions, thanks to strong leasing demand and reduced vacancies. As a result, URW has raised its adjusted recurring earnings per share guidance for 2022 and witnessed a rise in its share prices. The company now expects earnings per share to be at least €8.90, compared to the previous forecast of €8.20 to €8.40.

Digging deeper into the numbers, URW’s net rental income reached €1.139 billion, marking a 45% increase from the previous year, while earnings before interest, taxes, depreciation, and amortization (EBITDA) for H1 grew by 48% to €1.14 billion. Recurring net income also saw significant growth, exceeding 50% to reach €711 million. Furthermore, the company’s rent collection improved to 96% compared to 88% in 2021 and 73% in H1 2021. When it comes to tenant sales, Q2 saw a remarkable performance, reaching 105% of 2019 levels, exceeding expectations. Overall sales for H1 reached 99% of 2019 levels. On a regional basis, Continental Europe achieved 97% of 2019 sales, the UK reached 91%, and the US performed exceptionally well at 106%.

URW’s retail vacancies currently stand at 6.9% at the group level, showing a slight improvement from 7% last year. Vacancies in the UK decreased to 9.7% from 10.6%, while in the US, they dropped to 10.4% from 11%. In Europe, vacancies remained stable at 4%. Jean-Marie Tritant, CEO of URW, expressed satisfaction with the company’s operational performance, attributing it to strong leasing demand and the advantageous locations of URW’s assets in prosperous catchment areas. Tritant emphasized that URW is well-positioned to outperform competitors and gain market share as retailers prioritize their “drive to store” strategies. He also highlighted the stabilization of asset values and significant improvements in credit metrics, resulting from net debt reduction and increased EBITDA.

URW has made considerable progress in its asset disposal strategy, achieving 80% of its €4 billion target in Europe and streamlining its regional asset portfolio in the US. The positive first-half results reflect the resilience of URW’s business and its ability to adapt to changing market dynamics. With the ongoing recovery and strong performance, URW is confident in its ability to capitalize on opportunities in the retail sector and drive growth in the second half of the year.

Useful links:
1. URW official website
2. URW stock performance on Bloomberg