URW Sells Another Paris Office Building Under €3 Billion Divestment Program

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Unibail-Rodamco-Westfield (ASX: URW) today announced the completion of Paris-based office building sale as pursuant to the terms of agreement entered into in July 2018.

In an announcement to Australian Securities Exchange, shopping centre operator Unibail-Rodamco-Westfield told that the company has completed the sale of Capital 8 office building, located in Paris and the net proceed from the transactions was €789 Million. The sale has been made to a global real estate investment manager, Investo Real Estate. 

This office building, Capital 8, is located in the principal place of the central business district of Paris and covers gross lettable area of 45,000-meter square.

The agreement to sell Capital 8 was first entered into on 24 July 2018 as part of €3 Billion divestment program of the company. Unibail-Rodamco-Westfield has earlier stated that it will dispose-off European asset worth €3 Billion in rotation over the next several years.

Linklaters, PwC, Archers, Deloitte, Victoires Notaires Associés Humakey and Artelia have acted as advisor to buyer Investo Real Estate. Whereas, SCP Ginisty & Associés (notaire), Maître François Thomé, and Lacourte Raquin Tatar have advised the seller Unibail-Rodamco-Westfield for this transaction.

On financial front, the company has reported a tremendous performance growth of 40.2% in the proportionate Gross Rental Income (GRI) of the Shopping Centre division for the first nine month ended 30 September 2018. As a result, GRI of shopping centre division has jumped to €1,605.3 Million. However, the rental growth from European region has been impacted by the disposal of non-core shopping centres in Spain and Nordics.

During the first nine month of 2018, Unibail-Rodamco-Westfield’s proportionate turnover has gone up by 37.9% to €2,164.3 Million underpinned by the acquisition of Westfield Corporation.

In European shopping centres the group has recorded a decent pcp growth of 2.3% and 2.0% in tenant sales and footfall, respectively. Through August, tenant sales in Europe, up by 2.4%, outperformed the aggregate national sales indices by +186 bps, reflecting the superior quality and appeal of the Group’s European shopping centres.

The company has witnessed a strong growth in footfall that includes 4.6% rise in UK, 3.8% in France, 3.4% in Central Europe and 3.6% in Nordics. Furthermore, looking into full year 2018, URW forecasts the adjusted recurring earnings per share to range within €12.75 – €12.90.

The market sentiment seems to bearish today for URW. The company’s share price has dropped by 0.16% or $0.020 to trade at $12.50 on 9 November 2018 (2:38 PM AEST). Currently, the stock is trading at a PE of 26.270 x with market capitalization of $34.63 billion. Over the past three months, the stock has seen a negative performance change of 14.89%.


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