Westfield owner warns of second lockdown affecting footfall recovery

Unibail-Rodamco-Westfield Christophe Cuvillier
like-for-like sales rose by 30.7% in the UK
// Westfield parent company Unibail-Rodamco-Westfield posts footfall recovery in third quarter
// The shopping centre group saw UK like-for-like sales rise 30.7% for first 9 months of 2020
// Unibail said it is 72% through the negotiation process with tenants

Unibail-Rodamco-Westfield (URW) has reported a recovery in footfall in its third quarter as European centres were open and tenant sales continued to rise.

The Westfield owner said its like-for-like sales rose by 30.7 per cent in the UK for the first nine months of 2020.

Footfall recovered by 24 per cent in Europe thanks to “advanced” tenant negotiations.


URW said that as of October 27, the group was 72 per cent through the negotiation process, including agreements reached with nine of its top 10 retailers.

These negotiations are not about permanently changing lease structures or changing the basis for rent calculations.

The rent collection amounted to 95 per cent for the first quarter and 52 per cent for the second quarter – up from 46 per cent as at September 15.

URW added that additional rent relief may be required to support tenants as a result of the further closure of stores as from the end of October due to the second wave of Covid-19.

The group said the new restrictions in place may affect recovery and its fourth quarter results.

“The recovery accelerated through September, as all of the group’s European centres were open and restrictions mostly lifted in the US,” group chief executive Christophe Cuvillier said.

“We achieved a key milestone in our €4 billion disposal programme, with the signing of an agreement on October 12 to sell the SHiFT office building above book value.

“In October, a worrying increase in Covid-19 infections has led to a return of government restrictions, including renewed lockdowns, hence adding further uncertainty.

“These extraordinary challenges reaffirm the necessity of the group’s €9+ billion RESET plan, to immediately strengthen the capital structure and reduce risk.

“Taking into account the new restrictive measures in place and their impact on the group’s operations, URW currently expects its 2020 AREPS to be between €7.20 and €7.80 per share.

“For 2021, the group expects like-for-like retail NRI to grow by between +15 and +20 per cent on a cash basis versus that expected for 2020.”

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