Unibail-Rodamco-Westfield has set out its plan to be a pure-play European business by 2024, as it looks to harness the potential of its €41bn (£35bn) core portfolio.
Chief executive Jean-Marie Tritant said: “By 2024, we will have successfully reshaped the business to capture future growth, centred on our portfolio of flagship destinations in the wealthiest cities and catchment areas in Europe.”
Announcing its “path to 2024 and beyond” the shopping centre owner said European retail would represent the vast majority of its income, as it completes its deleveraging programme and sells out of the US. It is pushing ahead with its €2bn committed development pipeline, and has also identified up to 2.4m sq ft of further development opportunities, adding €1bn to the group’s controlled pipeline by 2024.
URW said it would focus on “densifying” its flagship assets with office, hotel and residential development, as well as repurposing retail space and “where appropriate, extending to add high-growth alternative uses”.
Tritant said: “Physical stores are a vital part of leading brands’ omni-channel and drive-to-store strategy, a role reinforced and validated by the post-pandemic recovery. Our top 50 retailers in Europe have increased their GLA and MGR with us since 2019, while in many cases streamlining their store portfolios elsewhere.”
URW intends to complete €1.5bn of its €4bn European disposal programme by the end of 2022, which combines the full sale of non-core assets as well as the disposal of stakes to institutional investors, but with URW retaining asset and property management fees going forward.
Once the deleveraging programme is completed, radically reducing its financial exposure to the US, URW expects its LTV to be below 40%.
URW said it planned to earn €75m a year from advertising, brand experience and data by turning URW’s 2021 footfall of 550m annual visits into “qualified audiences highly valued by brands”. It plans to spend €23m in additional capex to upgrade and increase its 1,700 in-mall advertising screens and roll out data capture technology across its Westfield-branded malls.
Tritant said: “We are building the capabilities to market URW’s pan-European platform to advertisers by creating a dedicated business division, powered by new data intelligence. These strong foundations will generate €75m in annual net revenues by 2024, with significant upside potential.”
It added that it expected European retail NRI and group EBITDA to reach pre-Covid levels on a run rate basis in 2023 with full effect in 2024, forecasting NRI of €1.56bn and EBITDA of around €1.9bn for its streamlined European portfolio.
Tritant concluded: “This is the beginning of an exciting journey for URW that will reshape the business to focus on our core strengths in Europe, create a new media platform and unlock value from our asset portfolio to generate sustainable growth by 2024 and beyond.”
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