Westfield centres rental income hit by coronavirus

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Westfield centres rental income hit by coronavirus
Westfield's UK centres took a 27.5% hit in net revenue income during the half-year period.
// Rental income at Unibail-Radamco-Westfield’s shopping centres hit as Covid-19 keeps shoppers away
// However, they’ve hailed an “encouraging footfall recovery” since post-lockdown reopening
// In the UK, was approaching 50% of 2019 levels but it’s higher in other parts of Europe

The Westfield shopping centre empire has been hit hard by the coronavirus pandemic after a 14 per cent drop in half-year sales and rent collection nosediving by just over two-thirds.

Unibail-Radamaco-Westfield said its net revenue income for the first half of its financial year fell 14.2 per cent to €1 billion (£960 million), while the overall portfolio asset value declined 5.1 per cent.

The firm’s two shopping centres in the UK – Westfield Statford and Westfield London in White City – were the worst hit, with a 27.5 per cent drop in net revenue income during the half-year period.


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Meanwhile, Unibail-Radamco-Westfield’s US-based flagship malls were down 15.3 per cent.

Rent collection from its retailer tenants fell significantly during the half-year period, down 67 per cent year-on-year.

The full impact of lockdowns was felt in the second quarter ending June 30, where rent collection was only 38 per cent.

Unibail-Radamco-Westfield said that at July 24, rent collection for July stood at 50 per cent, although the firm expects an improvement in its rental collection especially since negotiations have taken place with tenants regarding Covid-19 assistance.

The lockdowns across Europe and North America meant the Westfield centres were forced to temporarily close from around mid-March for an average of 67 days.

As of June 30, 97 per cent of the stores within its European shopping centres had reopened with footfall showing “an encouraging recovery”.

At Unibail-Radamco-Westfield’s two UK sites, footfall was now approaching 50 per cent of 2019 levels, although this was slower than the 80-90 per cent footfall recorded in parts of mainland Europe, including France and Spain.

Unibail-Radamco-Westfield expects its UK footfall to improve once the easing of lockdown restrictions on leisure operators – such as cinema and gym tenants – and more people returning to office work from August 1 are taken into account.

Chief executive Christophe Cuvillier said the first half was “significantly impacted by Covid-19” and that there was ongoing risk from government lockdown measures to stop the coronavirus’s spread, such as those being reimposed in California and Catalonia, Spain.

“While malls were allowed to open across Europe, stores in enclosed parts of centres in California were ordered to close again from July 13, with kerbside pick-up permitted, while Westfield World Trade Centre [in New York] still hasn’t been allowed to reopen,” he said.

“These developments show that the risk of the pandemic has not fully subsided.”

Last month, Unibail-Radamco-Westfield sold five French shopping centres through a £1.8 billion joint venture deal with Crédit Agricole Assurances and La Française.

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