Unibail-Rodamco-Westfield Disposes Off Its Poland Based Office Buildings

Global shopping center’s operator Unibail-Rodamco-Westfield (ASX:URW) decided to shave off its office building assets located in Warsaw.

In the announcement to Australian Securities Exchange, Unibail-Rodamco-Westfield announced that yesterday it has entered into an agreement with London Stock Exchange listed polish property company, Globalworth, to sell off its Skylight and Lumen office buildings in Warsaw. The sale consideration has been fixed at €190.0, representing a premium to the book value as at June 30, 2018.

URW’s Skylight and Lumen office buildings is located in the central business district of Warsaw in Poland, covering around 45,500 m² of gross leasable area (GLA).Â

Sale of Warsaw office buildings comes in line with recent sale of 40-storey Paris office tower, Tour Ariane. On 16 October 2018, the company announced that it is selling Tour Ariane to GIC, a sovereign wealth fund based in Singapore, for the consideration of 464.9 Million Euros. It is an office building situated in the key location of La Defense business district in Paris with a gross leasable area extending to 64,500 m².

These sell-off forms integral part of URW’s €3 Billion divestment program intended for European assets. The company’s plan to dispose off European assets was first announced on 12 December 2017 which is said to be executed over the next several years. The management informed that assets of more than 62% of the value of the program have been agreed to be sold or have completed the sale transaction.

Although the recently released financial information has revealed that there has been 2% rise in footfall across the European shopping centres in the third quarter of 2018. Whereas in other parts of the world, the group has recorded the footfall growth of 4.6% in UK, 3.8% in France, 3.6% in Nordics and 3.4% in Central Europe during Q3 2018.

Moreover, in the release of financial information for nine-month period to 30 September 2018, the group posted 40.2% growth in its gross rental income of €1,605.3 Million in the shopping centre division. Whereas a gross rental income from the office division has shown a marginal improvement of 2.9% on previous corresponding period.

The cost synergies potential along with the takeover of Westfield corporation in June this year are expected to be the driving forces in setting the growth trajectory right for Unibail-Rodamco-Westfield.

On the outlook front, URW expects its Adjusted Recurring Earnings Per Share for 2018 to lie within the range of €12.75 - €12.90. In the today’s update of Skylight and Lumen office building’s sale, the company told that the expected impact of this transaction has already been taken into the due consideration of ARR 2018 guidance.

With this update, the share price of Unibail-Rodamco-Westfield (ASX:URW) surged by 0.235% or $0.030 to close at $12.770 on 31 October 2018. But in the past three months URW stock performance has plunged by 14.15%. Today, the stock last traded at a PE of 26.730 x with market capitalization of $35.24 billion.

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