Setting The Growth Trajectory Right: Unibail-Rodamco-Westfield (ASX:URW)

  • Oct 26, 2018 AEDT
  • Team Kalkine
Setting The Growth Trajectory Right: Unibail-Rodamco-Westfield (ASX:URW)

Unibail-Rodamco-Westfield (ASX:URW) released its financial report dated September 30, 2018 today, i.e., October 26, 2018. Key highlights from the press release have been provided herein below:

The proportionate Gross Rental Income (GRI) of the Shopping Centre division reported an increase of +40.2% up to €1,605.3 Mn for the first nine months. Disposal non-core shopping centers in the Nordics in 2017 and in Spain in 2018 impacted the rental growth from European region. Delivery of Wroclavia and the extension of Centrum Chodov along with the acquisition of Metropole Zli?ín in 2017 boosted the performance from the Central Europe. WFD contribution since June 2018 was reflected in the gross rental income from US, and UK. Gross rental income from the office division reported a rise of 2.9% compared to the first nine months of 2017. Rental income from offices in France got affected on account of the Disposal of the So Ouest Plaza office building in 2017 .The triennial Intermat exhibition and the opening of Pavilion 7 in Porte de Versailles boosted the gross rental income of the Convention & Exhibition division grew by +6.8% to €148.0 Mn. 

Some retailers faced significant challenges in dealing with the tough retail environment during the period. However, tenant sales growth posted strong performance during the period. Tenant sales backed by strong performance in Cental Europe, France and Nordics grew by 2.3% for the group and +3.6% for flagships as on September 30 in comparison to the same period in 2017. The CNCC and IFLS indices outperformed by +343 and +493 bps, respectively. On a trailing 12- month basis, US speciality sales per sq. ft were up by +5.5% and +5.6% for flagships for the period through September 30.

Footfall in European shopping centers recorded 2.0% rise through Q3-2018. Strong footfall growth of +4.6%, +3.8%, +3.6% and +3.4%, from UK, France, the Nordics and Central Europe was posted respectively during this period.

The company has entered into an agreement with Singapore’s sovereign wealth fund, GIC on October 15 for the sale of Tour Ariane in La Défense. The company will also be getting rid of about eight assets under an agreement and the acquisition cost in totality has been indicated to be € 1,920 Million while net initial yield is indicated to be 4.5% with weighted average premium of over 8% to the book value, as on June 30, 2018. The net disposal price, NDP of these deposits is expected to amount to € 1,787 Million.

European disposal programme has already accomplished more than 55% of the € 3 Bn since June 30, 2018.

WFD acquisition as on June 7, 2018 and cost synergies realizations as on June 30 will be the major growth factors for URW. The impact of the accelerated disposals of approximately € 1.8 Bn already agreed or completed YTD (-11 cents), and shift of the recognition of development profits on projects in London and California, will result in expected adjusted Recurring Earnings per Share for the financial year 2018 to be in the range of € 12.75 - € 12.90.

Currently, the stock last traded at the levels of $12.65 (October 26, 2018) backed by healthy financials with strong growth potential.


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