Unibail-Rodamco-Westfield has scaled back its development pipeline, while reporting declines in NAV per share and UK rental income for its 2019 financial year.
The landlord has reduced its total development pipeline to €8.3bn (£7bn), down from €11.9bn at the end of 2018.
It has removed €3.2bn of projects that “require major redefinition, are significantly postponed due to market or administrative circumstances, or no longer meet the group’s return requirements”.
URW has since confirmed this includes its development in Croydon, since any project “being reviewed and require modifications have been removed from the development pipeline until the schemes, investment costs and delivery timeframes are finalised”.
However, The Croydon Partnership – the jv between URW and Hammerson behind the scheme – has reiterated that it remains “confident in Croydon as a destination and its potential for mixed-use development”.
“The Croydon Partnership is working on a comprehensive review of the Croydon development to respond to the rapidly changing UK market,” stated the partnership.
“As part of this review, we are focused on right-sizing the retail and introducing additional uses including a hotel and offices, alongside residential, and are looking at opportunities to reuse some of the existing buildings to ensure a more sustainable development.
“During this phase of the review, we are also working with the council and local stakeholders on the scheme and to ensure the town centre remains active.”
At the same time URW’s pipeline is shifting towards more mixed-use projects, split between retail (43%), dining & leisure (17%), offices (21%), residential (11%), and hotels (8%).
Around €2bn of projects are expected to be delivered this year, including extensions at Westfield Valley Fair and La Part-Dieu, and the Westfield Mall of the Netherlands redevelopment.
The news comes as like-for-like net rental income dropped by 4.2%, across the landlord’s shopping centres in White City and Stratford. This compared with 3.1% growth across its shopping centres in continental Europe.
EPRA NNNAV per share stood at €199.2, down 5.5% on the previous year. The gross market value of the group’s assets amounted to €65.3bn on a proportionate basis, which was largely static on the previous year.
The market value of its shopping centres across the group tallied €56.5bn, down by 2% on a like-for-like basis.
Tenant sales grew by 3.7% across the group in the year to 31 December, with the European business logging a 4.7% increase. In the US, tenant sales were up 1.6% on the previous year.
As part of its ongoing deleverage strategy, the company has also agreed to sell a 54.2% stake in a portfolio of five French centres, to Crédit Agricole Assurances and La Française. The sale is expected to generate €1.5bn in net proceeds.
URW said it closed €1.3bn of disposals in 2019.
Christophe Cuvillier, group chief executive of URW, said: “The group remains soundly positioned for the future. We will continue the execution of our strategy of concentration, differentiation and innovation and a disciplined approach to the allocation of capital and deleveraging.”
The company’s LTV stands at 38.6%.
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